At the 5th of the 15th session board meeting which held on March 17, 2011, U-Ming approved the new version of risk management tructure, and stipulated the "Risk factors and risk management policies" as well as the "Risk management policies and regulations". We use the Control Self-Assessment System (CSA) to evaluate the Key Risk Index (KRI) and highline the risks for our company. The consequences will be made on annual audit report and proposed to self-evaluation committee and then carry out in every department.
Risk Management Framework
The organizational framework of this Corporation in the field of risk management is based on the following principles: Relevant management units are in charge of different operations based on their nature, while the Auditing Division conducts assessments of existing or potential risks of different operations and develops risk-oriented annual audit plans based on these assessments. The different risk management units are listed below:
Board of Directors
The board of directors of this Corporation is the highest authority in the field of risk management. Its main goal lies in the promotion and implementation of overall risk management in compliance with relevant decrees. The board has a clear understanding of the risks associated with bulk shipping operations and ensures the effectiveness of risk management. The ultimate responsibility for risk management rests with the board.
The Auditing Division of this Corporation is an independent department that is subordinate to the board of directors. It ensures an effective implementation of the internal control system to fulfill the functions of risk management and promote sound corporate operations. The Auditing Division provides suggestions for improvements in a timely manner to ensure a continuous and effective implementation of independent internal review operations and provide a reference basis for review and revision of the internal control system.
This department is in charge of the planning of short-, mid-, and long-term financial and investment strategies and provides top executives with financial consultation and financial risk assessments of investments plans. With regard to investment risks, the department conducts assessments of business risks associated with investments targets and manages investment portfolios. As far as exchange rate and interest rate risks are concerned, hedging measures such as swap of derivative instruments are adopted. Business risks are also avoided and transferred through hull, war risk, and P&I insurance. Other types of insurance such as kidnap & ransom, loss of hire, and charterer’s liability are planned in accordance with business requirements.
Business department executives are responsible for first-line risk management and the analysis and monitoring of risks of subordinate units to ensure an effective implementation of the risk control and management mechanism and relevant procedures.
This department rigorously and meticulously monitors the construction of newly ordered ships to reduce operational risks associated with new ships and strengthens the maintenance of the current fleet to gain a full understanding of the current condition of ships and docks in order to reduce the risk of ship breakdowns. The ultimate goal lies in an extension of the service life of ships to maximize the turnover efficiency of the fleet.
Occupational Safety and Health Division
This corporation has established a labor safety and health office to ensure compliance with ISM Code regulations and implement safety management policies such as improved safety of shipping operations, guarantee of the safety of life at sea, and prevention of the pollution of marine environments by embracing a spirit of honesty, diligence, frugality, and caution. The office is in charge of safety and health services and ship safety inspections with the goal of improving the overall safety of shipping operations and the work environment. Preventive measures are adopted for anticipated risks to decrease business risks and increase client trust.
ISM Code educational training programs are organized on a regular basis in accordance with relevant regulations to familiarize personnel on board and ashore with their respective work environments in order to enhance safety management and reduce risks. The whole fleet of this Corporation meets the regulations set forth in the International Convention for the Safety of Life at Sea (SOLAS) and the International Ship and Port Facility Security Code (ISPS). Corresponding certifications have been issued by related agencies. The ultimate goal lies in the familiarization of personnel on board and ashore with their own security duties and measures to prevent illegal activities.