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

In 2019, FENC launched a phased plan to systemize risk indicators, and in 2023, the Global Overdue Information Platform was established with optimization underway for the Global Customer Credit Management Platform and Credit Customer Information Management Platform to facilitate the management of credit risks and lending activities. These real-time computing platforms automatically calculate credit ratings and determine the appropriate range of credit limits, which further enhance credit decisions.

In 2024, FENC completed the National Intelligence Sharing Platform while minimizing geopolitical risks by pairing real-time risk monitoring with appropriate risk control measures based on the Directions for National Risk and Crisis Monitoring, Management and Handling.

Process of Risk Alert System

Risk Alert Process

Risk Category	Detail	Measure
Human Resources	Continuing staff employability; employee benefits and wellbeing; employee turnover and hiring procedure; labor relations; performance review.	Conduct salary surveys for appropriate salary adjustments. Establish communication channels between the labor union and employer to assess employee needs. Include written exams and interviews during recruitment and implement a probation system.
External Environment	Geopolitics; trade liberalization; corruption; non-tariff barriers.	Calculate dumping margins quarterly and review the sales structure. Establish the code of conduct for antitrust compliance. Create the National Intelligence Sharing Platform to focus on the geopolitical risks in global regions.
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.	Monitor fluctuations in housing prices and the progress of land development monthly. Set safety stock levels for products with monthly review.
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.	Complete the online self-evaluation for regulatory compliance monthly at all units. Announce regulatory changes periodically and notify applicable units.
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.	Establish the Global Customer Credit Management Platform and Credit Customer Information Management Platform to review real-time credit conditions. Review the ratio of financing sources and examine the performance of individual reinvestment on a quarterly basis, and provide improvement recommendations when appropriate.
Information Security	Internal information security, supply chain information security, digital vulnerability management	Establish robust defense systems and operating procedures for reporting information security incidents. Provide 24-hour information security monitoring through an outsourced security operations center. Monitor press coverage and precautions from experts on information security incidents.