system (known as GRC), to prevent and reduce the impact of risk as well as to alleviate opportunities, enabling it to achieve strategic objectives and business goals. In 2021, the Company has been rated as the world’s number 1 member for sustainability in the Dow Jones Sustainability Indices (DJSI) chemicals sector for the 3rd consecutive year and also ranked among the top 10 companies in the DJSI World and Emerging Markets Index for the 9th consecutive year. Moreover, in the past year, the Company also received a top 10 score in Risk and Crisis Management, representing GC’s internationally accepted risk management standards. RISK MANAGEMENT STRUCTURE GC’s risk management structure is organized into three levels: corporate, business units, and operations. At the corporate level, the Board-appointed Risk Management Committee (RMC) is responsible for defining the direction of risk management guided by the risk appetite, risk policy, and five risk management frameworks: corporate, foreign exchange, product price and spread, subsidiaries, and investment. The committee is also tasked with monitoring progress and providing recommendat ions on GC’s r isk management . Furthermore, the Enterprise Risk Management Committee (ERMC), which is comprised of executives from each function, is responsible for regularly monitoring risk management progress to ensure its alignment with the policies and frameworks approved by the Risk Management Committee. In addition, all business units are required to conduct an adequacy assessment of the internal control systems through the Control Self-Assessment tool (CSA) as well as to manage the operational risks through the Operational Risk Management tool (ORM) to ensure that the control measures are in line with the policies, objectives, risk appetite, and risk management frameworks approved by the Risk Management Committee. For specific business risks, GC has prescribed risk management at the business unit and functional level and/or appointed specific committees to enhance flexibility and ensure that the risk management is consistent with the operational environment, as detailed below: Value Chain Management Committee (VCM) is responsible for closely following the market situation on a weekly basis and providing guidelines for managing risks of feedstock, product price and exchange rate volatility to be in accordance with the risk management frameworks approved by the Risk Management Committee. GC Group’s Sustainable Development Committee (SDC) is responsible for monitoring sustainable development performance to ensure appropriate sustainability risk management for both existing and future operations. In addition, the Sustainability Governance Structure has been set up in 2021, covering the operations of Decarbonization in seven key areas: (1) Asset & Efficiency Improvement, (2) Low Carbon Power & Heat, (3) Portfolio Evolution, (4) Circularity Business (5) New Technology & CVC Implementation, (6) Offsetting, and (7) Decarbonization Center of Excellence, to ensure achievement of the decarbonization goals and pathways in the short, medium and long term in 2050. Investment Committee (IC) is responsible for overseeing and reviewing investment projects to ensure their compatibility to GC’s strategies as well as supervising risk assessment and risk management measures for such projects to enable the organization to efficiently manage its investments with maximum benefits. Other Committees include the GC Operational Excellence, the Safety, Health and Environment Governance Committee, the Information Technology Governance Committee, the Corona Virus Infection Prevention and Control Committee, the Water Management Taskforce, and the Personal Data Protection Act Working Team. RISK MANAGEMENT TOOLS GC has studied and adopted various risk management tools to identify, analyze, assess and monitor risks and uncertainties such as determining amount of risk the Company is willing to take in pursuit of objectives (Risk Appetite), assessing and prioritizing risks using a Risk Map, monitoring risk management through the Mitigation Plans and the Key Risk Indicators (KRIs). In addition, the Company also applies the Sensitivity Analysis and the Stress Testing to evaluate the potential impact of 77 BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX