Risk Management

Simplo regards the board of directors as the highest risk management organization, and had issued the "Risk Management Policy and Procedures" in 2021. Through management meetings of each departments, potential risks related to operations are identified and responded to.

• Risk Management Policy：Risk Management Policies and Procedures(Link)

• Scope of risk management: The risks faced by the company are divided into four categories: business, finance, environment and operation.

• Risk Management Process：

   

  Risk Management Working Group

  
  Goals

  • In response to the requirements of corporate governance laws and regulations, introduce an enterprise risk management mechanism
  • Refer to "ISO 31000 Risk Management -Principles and Guidelines" to perform enterprise risk analysis and assessment
  • Comply with Task Force on Climate-related Financial Disclosures (TCFD) requirements (including governance, strategy, risk management, indicators and targets)
  • Disclose relevant information in compliance with GRI and customer requirements

  Operating situation

  The company implements the risk management mechanism and reports the operation status of risk management to the board of directors once a year. The operation status in 2022 is explained as follows.

  

  Category	Operating situation
  Business Scope	Including corporate governance risk, reputation risk, strategic risk, operational risk, human resource risk, or the impact of changes in domestic and foreign policies and laws on the company's sustainable operation, etc. The company conducts group operation management review meetings every month to identify and deal with operational risks.
  Finance Scope	Including financing risk, investment risk, liquidity risk, exchange rate and interest rate risk, risk of capital lending to others, endorsement guarantee risk, derivative commodity transaction risk and financial decision-making risk, etc., which have an impact on the company's finances. The financial management department regularly reports to the management to monitor risks and implement policies。
  Operation Scope	Including information security risks and occupational safety and health management risks. (1) The Information Department is responsible for the planning and implementation of the cyber security related norms, the executives of the Information Department will regularly participate in the internal information security related meetings, and pay attention to the Information Security related issues regularly; in addition, the audit office is the audit unit for cyber security monitoring and conducts annual cyber security audits on the internal control system - computer cycle to evaluate the effectiveness of internal controls over the Company's information operations. (2) Labor representatives are selected in accordance with occupational safety and health related laws and regulations, and a "Safety Committee" is convened on a quarterly basis to communicate and exchange ideas on occupational safety and health related issues, to ensure and maintain the safety and health conditions of the workplace in compliance with legal requirements, and to actively seek and implement opportunities and actions for continuous improvement. Simplo implements education and training activities such as hazard notification education and training (when new recruits arrive on duty or before job adjustment), self-defense firefighting formation (at least once every six months), emergency response drills (at least once a year) and other education and training activities in accordance with laws and regulations.
  Environment Scope	Including climate change risks. The company has established the CSR Committee in October 2021, and holds meetings every six months to continuously implement solutions to issues such as circular economy, green innovation, social care, and honesty and integrity,.

  Risk identification and operation

  To strengthen the "Risk Management Task Force’s" understanding of risk management, a risk management education and training was held in March 2024. Participants included 55 individuals, such as members of the Sustainability Committee and various department heads. The course content includes: Global risk trends, international risk management standards, FSC’s guidelines on risk management for listed companies, and practical aspects of corporate risk management. Conduct risk questionnaires after class and develop countermeasures. The questionnaire content is based on international trends, customer requirements, regulations, and industry information to identify four major categories of risks, including “Strategic”, “Operational”, “Environmental”, and “Hazardous”, which further elaborates on 12 specific risk issues within these categories.