Sustainable Risk Control

FENC establishes advanced indicators and responses to avert risks and addresses irregularities in the indicators with corresponding measures, improvements, and optimization for prevention.

FENC established Risk Alert System in 2015. The administrative units conduct monthly follow-ups and examine corporate risks. In 2024, the Company held 12 risk control meetings, establishing advanced indicators and responses to avert risks, and address irregularities in the indicators with corresponding measures, improvements and optimization for prevention.

Administrative units conduct monthly follow-ups to examine corporate risks. Establishing a Risk Control Indicators to address irregularities with corresponding measures, improvements, and optimization. Key tasks in 2024 include:

Enhancing cybersecurity protection mechanisms to prevent major cybersecurity incidents and losses
Participating in the Dow Jones Sustainability Index assessments to align with sustainability trends and strengthen internal sustainability management measures
Adopting necessary measures to secure accounts receivable in response to geopolitical conflicts in the Middle East and other regions
Applying generative AI to accelerate digital transformation
Promoting energy and carbon reduction projects to implement sustainability actions

Starting from 2019, risk indicators are implemented in a systematic approach with risk management platform. For instance, the Company introduced credit rating and instant credit calculator to address credit risks and crediting management. The system automatically conducts the calculation to determine reasonable credit limits, which enhances the quality of credit decisions. In 2023, FENC completed three major digital projects, including the establishment of the Global Overdue Information Platform as well as the optimization of the Global Customer Credit Management Platform and Credit Customer Information Management Platform.

Process of Risk Alert System

Risk Alert Process

Risk Category	Details
Human Resources	Continuing staff employability; employee benefits and wellbeing; employee turnover and hiring procedure; labor relations; performance review.
External Environment	Geopolitics; trade liberalization; corruption; non-tariff barriers.
Corporate Assets	Legal training, anti-fraud and anti-corruption; documentation and information management; regulatory monitoring and compliance; contractual agreement and subsequent management; litigation and dispute resolution.
Legal Affairs	Legal training, anti-fraud and anti-corruption; documentation and information management; regulatory monitoring and compliance; contractual agreement and subsequent management; litigation and dispute resolution.
Finance and Accounting	Fair presentation of financial reports; compliance and completeness of information disclosure; customer credit and account receivable management; tax audit; financing and capital management; capital expenditure procedure and control; investment management; insurance and hedging.