Risk Management Organizational Structure and Procedures
To enhance CMMT's robust operation and sustainable development,
a well-established risk management mechanism has been put in place to reasonably ensure the achievement of the Company's strategic goals.
The Company has set up its risk management policies and procedures according to the“ Regulations Governing Establishment of Internal Control Systems by Public Companies.”
The Company formulated the "Risk Management Policy and Procedures" in 2021, which was approved by the Board of Directors.
The revised version was subsequently approved by the Board of Directors on May 8, 2023.
The highest decision-making authority in the company's risk management organizational structure is the Board of Directors,
supervised by the Sustainable Development Committee. Under the purview of the Sustainable Development Committee, there is the Sustainable Office and five task groups: Environmental Sustainability,
Green Manufacturing, Green Supply Chain, Employee and Social Care, and Corporate Governance.
The Corporate Governance group (Audit Department, Legal Compliance, and Legal Affairs) serves as the primary team for risk governance, responsibility governance, and regulatory compliance,
and the organizational structure includes various business execution units.
Operating situation
CMMT's risk management procedures include processes for identification, measurement, response, monitoring, and reporting of various risks. If the quality management systems have other provisions,
those provisions shall prevail. During risk identification, the operating environment is analyzed to cover various business and operational activities, and manage risks either qualitatively or quantitatively.
Then a risk analysis and evaluation is performed. Risk analysis includes analyzing the degree of negative impact to understand the risk's effect on the Company.
Each business execution unit should also classify the severity and probability of identified risk events into risk levels. Risk evaluation, on the other hand,
compares the analysis results with previously set acceptable risk levels, serving as a reference for determining the priority of risk control and selection of response measures.
After evaluating and summarizing the risks, each business execution unit takes appropriate responses to the risks so that risks are controlled within an acceptable level.
• Risk Avoidance: Refrain from engaging in activities that might generate risks.
• Risk Reduction: Take measures to reduce the impact after the occurrence of the risk and/or its occurrence probability.
• Risk Transfer: Shift a part or all of the risk to be borne by others.
• Risk Exposure: Do not take any measures to change the possibility of risk occurrence and its impact.
Risk Management Assessment Report, through resource integration, summarizes the results of the previous year every January and initiates the identification of new year risks. It tracks the execution status mid-year and reports to the Sustainable Development Committee. The committee reports to the board at least twice a year, with the most recent report submitted to the board on December 18, 2023, regarding its operational status
• Risk Avoidance: Refrain from engaging in activities that might generate risks.
• Risk Reduction: Take measures to reduce the impact after the occurrence of the risk and/or its occurrence probability.
• Risk Transfer: Shift a part or all of the risk to be borne by others.
• Risk Exposure: Do not take any measures to change the possibility of risk occurrence and its impact.
Risk Management Assessment Report, through resource integration, summarizes the results of the previous year every January and initiates the identification of new year risks. It tracks the execution status mid-year and reports to the Sustainable Development Committee. The committee reports to the board at least twice a year, with the most recent report submitted to the board on December 18, 2023, regarding its operational status
Evaluation Mechanism
Interest and Currency Exchange Risk
Authority: Finance Department
There is a dedicated staff to conduct exchange rate hedging for the company's monthly receipts and payments, and the weight of hedging will be determined by the dedicated staff and relevant senior executives based on the prevailing exchange rate. CMMT is a conservative and stable hedging product that hedges only the physical parts of the company.
Authority: Finance Department
There is a dedicated staff to conduct exchange rate hedging for the company's monthly receipts and payments, and the weight of hedging will be determined by the dedicated staff and relevant senior executives based on the prevailing exchange rate. CMMT is a conservative and stable hedging product that hedges only the physical parts of the company.
Industry Change Risk
Authority: Planning Department
CMMT's upstream and downstream suppliers are mostly listed companies, so the Planning Office will compile and analyze the quarterly financial reports and report them in the executive meeting room. At the same time, we regularly track industry news and research information in order to provide the management with the latest industry dynamics and changes, and make the most appropriate decisions.
Authority: Planning Department
CMMT's upstream and downstream suppliers are mostly listed companies, so the Planning Office will compile and analyze the quarterly financial reports and report them in the executive meeting room. At the same time, we regularly track industry news and research information in order to provide the management with the latest industry dynamics and changes, and make the most appropriate decisions.
Credit Risk
Authority: Finance Department and Planning Department
The Finance Department sets credit terms for customers according to their financial status and credit rating, regularly reviews the status of accounts receivable collection and collection operations, and works with the Planning Office to analyze the operating conditions of industries and customers to reduce the risk of bad debts.
Authority: Finance Department and Planning Department
The Finance Department sets credit terms for customers according to their financial status and credit rating, regularly reviews the status of accounts receivable collection and collection operations, and works with the Planning Office to analyze the operating conditions of industries and customers to reduce the risk of bad debts.
Disruption of Operations and Property Damage due to Natural Disasters
Authority: Finance Department and Disaster Prevention Department
In order to avoid the risk of natural disasters or accidents that may cause damage to the company's property and interruption of operations, we purchase insurance to transfer the related risks. In case of natural disasters such as typhoons and earthquakes, the commanding officer will quickly deploy emergency response manpower to reduce disaster losses through rapid inventory, control and containment of the disaster area.
Authority: Finance Department and Disaster Prevention Department
In order to avoid the risk of natural disasters or accidents that may cause damage to the company's property and interruption of operations, we purchase insurance to transfer the related risks. In case of natural disasters such as typhoons and earthquakes, the commanding officer will quickly deploy emergency response manpower to reduce disaster losses through rapid inventory, control and containment of the disaster area.
Liquidity Risk
Authority: Finance Department
In order to maintain liquidity and ensure smooth capital flow, CMMT continues to expand its long-term and short-term financing channels to diversify its capital sources and strengthen its capital structure with capital market financing tools at the appropriate time.
Authority: Finance Department
In order to maintain liquidity and ensure smooth capital flow, CMMT continues to expand its long-term and short-term financing channels to diversify its capital sources and strengthen its capital structure with capital market financing tools at the appropriate time.
Information Security Risk
Authority: Information Department
CMMT is committed to protecting the confidential information and intellectual property of the company and its stakeholders to ensure the interests of the company, its customers, employees and all shareholders, and to maintain the company's competitiveness. CMMT has an isolated network and regularly educates employees on information security related information and measures to prevent external parties from stealing or photographing company information.
Authority: Information Department
CMMT is committed to protecting the confidential information and intellectual property of the company and its stakeholders to ensure the interests of the company, its customers, employees and all shareholders, and to maintain the company's competitiveness. CMMT has an isolated network and regularly educates employees on information security related information and measures to prevent external parties from stealing or photographing company information.
Human Resource Risk
Authority: Human Resource Department
Due to decreasing fertility rate in Taiwan, the supply of manpower in the manufacturing industry continues to decline and faces difficulties in recruiting workers. In addition to reviewing the salary structure and improving employee benefits, CMMT has started to bring in foreign workers to fill the labor gap.
Authority: Human Resource Department
Due to decreasing fertility rate in Taiwan, the supply of manpower in the manufacturing industry continues to decline and faces difficulties in recruiting workers. In addition to reviewing the salary structure and improving employee benefits, CMMT has started to bring in foreign workers to fill the labor gap.
Industrial Safety and Environmental Risks
Authority: Industrial Safety Department, Plant Management Affair
Environment, safety and hygiene are issues of great concern to CMMT. We have been continuously reducing the environmental impact caused by production since the establishment of our factory. We also provide a safe and low-pollution working environment for our employees.
In recent years, we have established water and power saving facilities, and we have invested in waste treatment and water discharge, and we are striving to become an environmentally friendly company.
Authority: Industrial Safety Department, Plant Management Affair
Environment, safety and hygiene are issues of great concern to CMMT. We have been continuously reducing the environmental impact caused by production since the establishment of our factory. We also provide a safe and low-pollution working environment for our employees.
In recent years, we have established water and power saving facilities, and we have invested in waste treatment and water discharge, and we are striving to become an environmentally friendly company.
