The purpose and aim of risk management

                                      By Dr. Chao Yuang Shiang

The purpose of risk management is to secure positive development of earnings of the Company and the continuation of the business by implementing risk management cost-effectively and systematically throughout the different businesses.

In addition, risk management is part of the Company's strategic and operative planning, daily decision-making process and internal control system. Business objectives, risks and risk management operations are combined through risk management as one chain of events.Company adheres to the risk management policy approved by the Board.Risk management contains all actions, which are connected to setting up targets, identification of risks, measurement, review, handling, reporting, follow-up, monitoring and reacting to risks.

The aim of risk management of the Company has the following ten important concepts which should be carefully taken into consideration.

• systematically and thoroughly identify and assess all major risks, which threaten the achievement of objectives, including risks related to business operations, property, agreements, competence, currencies, financing and strategy;
• optimize business opportunities and secure continuation of business;
• recognize and identify uncertainties and subsequently develop the prediction of risks and measures needed to manage risks;
• take only calculated and assessed risks with respect to e.g. expanding the business, increasing market share and creating new businesses;
• avoid or minimize liability risks;
• ensure the safety of products, solutions and services;
• establish a safe working environment for the employees;
• minimize possibilities for unhealthy occurrences, crimes or misconduct by operating procedures, control and supervision;
• inform interest groups of risks and risk management; and
• be cost-effective in risk management.

Once risks have been identified and assessed, all techniques to manage the risk fall into one or more of these four major categories stated as follows.

1.Avoidance (eliminate, withdraw from or not become involved)

2.Reduction (optimize – mitigate)

3.Sharing (transfer – outsource or insure)

4.Retention (accept and budget)

Sincerely,

Dr. Chao Yuang Shiang

10-February-2015