Risk Management

01-Mar-2016 Corporate Governance

In conducting its business, the Company faces the risk of which may affect the Company’s results of operations if not anticipated and prepared to handle better.

Financial risk management policies implemented by the Company in the face of these risks as the following:

  • The Credit Risk

The Company’s exposure to credit risk primarily arises of management of accounts receivable. The Company did supervision so as to collectability of receivables received billing in a timely manner and also conduct a review of each receivable customers periodically to assess the potential on set of billing failure.

  • Interest Rate Risk

Interest rate risk exposure of the Company primarily is derived from bank loans by obtained the Company that the fair value of future cash flows will fluctuate because of changes in interest rates market. The Company manages this risk by constantly monitor the movement of interest  rates prevailing market and manage the availability of current cash used to pay off the loan and work capital.

  • Foreign Currency Risk

The Company’s exposure to foreign exchange risk foreign currency arises mainly from the fair value of cash flowing the future fluctuate in cash at bank due to exchange rate exchanges foreign currency. In managing risk, the Company minimize inventory purchases denominated in foreign.

  • Liquidity Risk

The Company’s exposure to liquidity risk arises primarily form the placement of excess funds can receipts after deductions of use cash to support the business activities of the Company. The company manages liquidity risk by maintaining adequacy of cash flow and banking facilities by continuously monitor cash flow projections and availability funds. The Company is also implementing a risk management liquidity carefully to maintain sufficient cash balance from billing the sale and put the excess cash in financial instruments with a level of risk that low but adequate yields and considering the reputation and credibility of the financial institution.