The Company maintains and updates its systems to identify, analyze, manage and mitigate risk, overseen by the Risk Management Division. Given the wide range of normal business risks and other extraordinary risks, emphasis is on continuous development of structured and systematic processes that result in sustainable business operations and enhanced performance.
Within the overall framework of risk management, the Risk Management Division has primary duties to assistthe BOD in developing, executing, reviewing and strengthening Company-wide strategies to minimize our business risks.
In fulfilling its responsibilities, the Risk Management Division collaborates closely with the Internal Audit Division, the Audit Committee and the Company’s external auditors on identifying, evaluating and mitigating risks by reviewing risk parameters in various areas, particularly critical systems, areas affecting costing and/or profitability, fraud, and abuse of authority.
The Company applies specific steps based on the following general strategies in the area of risk management:
- Integrate risk management processes into the Company’s business processes;
- Increase risk awareness at all levels;
- Encourage regular feedback on risks faced by the Company;
- Increase risk competency of risk management personnel through training;
- Development of business continuity management through business planning.
The Company’s overall risk management objective is to minimize, as much as possible, the probability and/or impact of foreseeable threatening occurrences/exposures and to optimize achievement of corporate objectives.
The main risks that the Company faced in 2020 can be viewed in two main areas:
- As a retailer in the mass market, the Company relies on strong consumer spending and trust, and should the economy suffer a slowdown, or the Company fails to maintain its brand in a competitive position, there would be a negative effect on performance. By developing a strong value for quality positioning in the market and by remaining attentive to customer needs, the Company is confident to successfully manage these risks.
- The Company relies on a national infrastructure network for distribution and store operations, should there be a business interruption caused by natural disaster or other large-scale incident, there is a risk of not being able to either keep stores open or fully stocked. In line with growth plans, the Company is developing robust and flexible systems, including back-up generators and secondary supply alternatives, to help ensure that stores remain operational despite disruptions.