Risk assessment

	Risk Management Policy
	The Risk Management Policy of Longchen P&P is the mechanism meant to define risk identification, weighing, supervision, and control. The integrated cross-regional risk management system is created to govern as required systematically major risks such as product market, product research and development, process development, raw material purchase, human resources planning, and financial and accounting control dealt with in respective business operations. Besides management according to system regulations, the automatic audit mechanism is introduced to the existing system for more effective supervision, evaluation, and control of risks. The Company assigns respective departments to take charge of the evaluation, control, follow-up, and supervision of the strategic risk, the financial risk, and the operational risk. Respective responsible departments report periodically the risk control status to the heads responsible for respective systems and the Chairman and also adequately to the Board of Directors depending on the extent of influence by the risks.
	2022 Risk Management Project Report Board of Directors (November 11, 2022) .
	Major Responsibilities of the Risk Management Organization
	Major Risk Management and Opportunity Identification
	Besides risk management of daily operations, Longchen P&P identifies and analyzes potential risks and opportunities facing the corporation taking into consideration the external environment and trend changes. The PDCA management circulation model is adopted and countermeasures are prepared step by step in an orderly and systemized way.
	Risk Identification and Management Strategy
	Major Risk Management
	Trends and Opportunities in the External Environment
	Important Subject Risk Evaluation Item Risk Management Policy Environment Energy Efficiency Enhancement / Environmental Pollution Prevention / Response to Climate Change 1.Upholding the concept of energy saving and carbon decreasing, driving energy management system complied with international standards. 2.Achieving the basic requirement of complying with environmental protection regulations with proper pollution technology and equipment, and committing to observing other requirements. 3.Keeping improving, resource saving, recycling and other pollution precautions, expecting that the environmental impact of the industry will decrease to the lowest. 4.Establishing and practice environmental goals through document standardization, PDCA management circulation; additionally holding employee training, making the personnel participate in the activities of cherishing resources and protecting the environment. 5.Timely disclosing environmental policies for the public, being neighborly and landscaping to raise corporate image, and achieve the goal of sustainable operation. Society Relationship of Labor and Capital / Occupational Safety and Health / Sustainable Supply Chain 1.Cultivating the excellent talent recognized company culture, prospect and core value, collectively striving to achieve Longchen P&P’s missions. 2.Practicing risk evaluation and improvement of safety and health in the factory, establishing Safety Committee, weekly discussing risk matters of safety and health in the factory, and progress of various improvement, announcing important work safety matters in morning meeting at regular intervals. 3.Choosing eco suppliers, executing safety and health management for main suppliers. Corporate Operating and Governance Regulation Compliance / Information Protection and Trade Safety Establishing operating strategy and industry culture of emphasizing risk management, and considering the results after qualifying and quantifying the risk management as the reference of establishing operating strategy.