GC One Report 2023 [EN]

Risk Management Risk Management and Risk Factors Risk Management In 2023, GC faced various challenges amid the rapidly changing circumstantial factors, particularly global geopolitical conflicts and concerns over economic recession, which exerted pressure on both demand and supply and cause the overall profit margins for petrochemical products shrink further than in the past. However, GC implemented various measures to mitigate the impact on its operations and maintain liquidity, including cost reduction initiatives, investment prioritization, production and sales plan adjustment, and product portfolio realignment to suit the evolving market conditions. The goal was to ensure that GC could respond to diverse challenges in an effective and timely manner, minimize potential damage from arising risks, and secure business opportunities that would increase its competitiveness and create sustainable value for the business. GC places utmost emphasis on risk and crisis management, which formed the foundation for sustainable business growth in the current situation. GC’s risk management is based on the Committee of Sponsoring Organizations of the Treadway Commission (COSO)’s Enterprise Risk Management Framework, or ERM COSO (2017), the International Organization for Standardization (ISO)’s guidelines, or ISO 31000:2018, the Thai Corporate Governance Code for Listed Companies 2017, and its anti-corruption guidelines and commitment as a certified member of Thai Private Sector Collective Action Against Corruption (CAC). Furthermore, GC integrates its enterprise risk management system with policies, laws, regulations, and operational standards, encompassing governance, risk management and internal control, and compliance, or GRC for short, to ensure that GC has suitable risk management as well as adequate and effective enterprise-wide control systems, thus enabling the organization to achieve its strategic goals and various key objectives. Risk Management Structure GC’s risk management 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, price-andspread, subsidiaries, and investment. It is also tasked with monitoring and providing recommendations on the management of risks towards the achievement of GC’s strategic and business goals. The Enterprise Risk Management Committee (ERMC) is comprised of executive officers from each function responsible for regularly monitoring risk management progress to ensure alignment with the policies and risk management frameworks approved by the Risk Management Committee. In addition, GC requires all units to perform self-assessment of the adequacy of the internal control system using the Control Self-Assessment (CSA) and Operational Risk Management (ORM) tools for operational or process risk management to ensure compliance with the policies, objectives, risk appetite, and risk management frameworks approved by the Risk Management Committee. For business-specific risks, GC has instituted either risk management at the business unit/function level or appointed special purpose committees to facilitate direct management and close monitoring of situations, including: The Value Chain Management (VCM) Committee is responsible for closely monitoring the market situation on a weekly basis and providing guidelines for managing risks related to product price and spread as well as exchange rate volatility in accordance with the risk management framework approved by the Risk Management Committee. 86

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