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Risk Management
Business Risk Management
BizLink regularly holds strategic development meetings each year to discuss our operational strategies for long-term development in the future. In order to protect shareholders’ interests, BizLink focuses on our performance in the businesses we engage in based on the principles of soundness and pragmatic business philosophy; therefore, we do not engage in any high-risk or high-leverage investing activities. BizLink has established the “Procedures for Loaning of Funds” and the “Procedures for Providing Endorsements/Guarantees” for compliance within our company, but continues to actively assess the risks and benefits of incorporating new technologies and enhance our competitiveness in our core businesses. On the other hand, we increase our production capacity and manufacturing capabilities by maximizing the use of existing equipment while staying committed to transforming ourselves into an all-round solution provider and offering high-value-added services that are more convenient and adaptable in hopes of increasing our gross profit margin.
Financial Risk Management
Exchange rate, interest rate, and fluctuations in product prices pose more challenges to BizLink because any slight miscalculation will not only eat away our profits, but also affect shareholders’ interests. Therefore, BizLink has established the “Procedures for Trading Derivative Instruments”, which clearly specifies the hedging instruments to be used and assessment and evaluation of these instruments. BizLink uses various financial instruments, including spot or forward contracts, swaps, and options, to minimize risks. The main currencies currently used by BizLink are the U.S. dollar and the Chinese Yuan. Since quotations for product exports and raw materials purchased overseas are denominated in the U.S. dollar, most of the foreign currencies can be written-off through regular transactions so as to achieve the effect of auto hedging. In the future, we will intensify the auto hedging effect by offsetting foreign currency obligations and debts, and also use derivative instruments to conduct hedging under appropriate risk regulations.
Risk Identification and Control Measures in 2023
Economic
| Risk Identification | Control Measure |
|---|---|
| Finance Management, Legal Affairs, Audit, Public Relation and Investor Relations | • Kindly refer to “Risk Assessment in Recent Years and as of the Date of Printing of this Annual Report” in Chapter 7 “Financial Status, Performance Review, and Risk Analysis” in our 2023 annual report for more details. |
| Supply Chain Management | • Ensure that products and supply chains do not contain conflict minerals • Establish the Guidelines for New Supplier Selection • Classification management according to supplier characteristics and risks |
| Ethics, integrity, and anti-corruption | • Establish the “Employee Code of Integrity,” the “Ethical Corporate Management Best Practice Principles,” and the “Procedures for Ethical Management and Guidelines for Conduct” • Continue to conduct ethics regulations and anti-corruption awareness training for employees • Establish grievance and whistleblowing channels that bypass company hierarchy |
Environment
| Risk Identification | Control Measure |
|---|---|
| Climate change risks | • Develop green manufacturing technologies • Establish a green factory management system • Implement energy-saving and carbon-reducing projects • Conduct energy audit and source management |
| Increasingly stringent environmental laws and regulations | • Establish management guidelines and directions for various operations in compliance with relevant regulatory requirements • The Occupational Safety and Health Committee inspects compliance with environmental laws and regulations on a regular basis |
Society
| Risk Identification | Control Measure |
|---|---|
| Human capital risk management | • Regularly conducts human resource audit and inspection • Devise and implement employee training and development plans • Design competitive remuneration and employee welfare measures •Conduct comprehensive training and implement local talent development and training programs |
| Safety and health risks | • Regularly examine compliance with occupational safety regulations • Conduct occupational safety and health training for employees • Implement hazard and risk protection measures and operational control • Maintain workplace safety and order of production • Implement fire prevention measures, and enhance fire prevention awareness and firefighting training among employees • Implement fire source control and safety self-inspection mechanisms • Carry out regular electrical equipment inspections |
| Product quality and safety management | • Carry out product design according to international regulations and customer standards • Strengthen our technical team |