Risk management report
RISK MANAGEMENT SYSTEM OF THE COMPANY
The world economy in 2020 faced the strong outbreak of the COVID-19 pandemic and its unpredictable developments on a global scale, causing the global GDP to go down by 4.9%, major economies facing steep recession, the worst in decades, social distancing, border closures, widespread and prolonged disruptions in trade, global supply chains severely impacted, etc. In the last months of the year, when most economies restarted after the blockade due to the Covid-19, the global trade and commodity prices were gradually recovering, the global stock markets surged thanks to the positive signals from the production and effectiveness of the Covid-19 vaccine.
Domestically, 2020 is a pivotal year with a series of important trade agreements signed and put into practice such as EVFTA, RCEP, UKVFTA, etc., allowing Vietnam to be in tune with the world and welcoming golden opportunities. In the context of the still complicated development of the Covid-19 pandemic, Vietnam has become the highlight of the world in terms of good disease control while maintaining economic growth. The country’s GDP is among the highest in the world. In response to the socio-economic situation in 2020, the risk management system of Gemadept Corporation has changed as follows:
- Promulgate resolutions and policies according to the time of socio-economic situation and market fluctuations to strengthen inspection and supervision, ensuring stability in production and business activities of the Company and mitigate the impact of the COVID-19 pandemic.
- Change some processes and reports, enhance the timeliness in administration.
- Change the structure, risk catalog, and priority order according to the operation situation of the units.
Continuing to improve the Internal Audit work according to Decree 05/2019/ND-CP dated January 22, 2019 of the Government, the model of three closely coordinated lines of defense has controlled the operation of the whole system, helping to prevent, promptly detect, handle risks and inadequacies in management and administration, contributing to Gemadept's stable operation and achievement of set targets.
RESULTS OF RISK MANAGEMENT IN 2020
For Gemadept, 2020 is a milestone marking 30 years of the Company's establishment and development. Overcoming the difficulties of a chaos year, the Company continued to maintain its stable operations and growth. During the year, the Company ensured the progress of construction of the Gemalink Deep-sea Port project and has put it into operation on schedule in early 2021, at the same time, invested in expanding the berth and modern cargo handling equipment for existing ports such as Nam Dinh Vu Port, Binh Duong Port, upgrading the warehouse system, etc., in order to increase the operational capacity and meet the needs for expansion and development of the Company's operations.
In 2020, the Company completed the set plan, the weaknesses and inadequacies of the units during the year were detected and handled promptly without affecting the overall operations of the Company. During the year, Gemadept was once again honored as the leading enterprise in the "Top 10 prestigious Logistics companies – Industry group: International Freight Forwarding, Warehousing, Logistics Services" honored by Vietnam Report.
RISK MANAGEMENT PLAN FOR 2021
The world economy in 2021 is forecast to grow by 4.7%. The best scenario is that the Covid-19 pandemic is going to be under control in 2021, the global economy will recover. However, the world economic organizations also warned that the situation could become more serious if the Covid-19 pandemic continues to develop complicatedly or the vaccination campaigns against Covid-19 are delayed. Domestically, with the drastic and effective solutions in realizing the dual goal of "preventing the pandemic while sustaining socio-economic development", the Government has set a GDP growth target of 6.5% in 2021.
Accordingly, the Risk Management in 2021 will focus on the following main tasks:
- Continue to update the situation of the Covid-19 pandemic, working together with the units to assess the impact to have a plan to defend, respond to minimize the impact from the pandemic, and accelerate development as soon as the pandemic ends.
- Develop a risk management plan, prioritize, focus on key risks according to market movements and operational situation of the units.
- Monitor the implementation of the production and business plan, cut costs in 2021 at the units, warning them about the factors affecting the ability to complete the planned goals.
- Monitoring, checking, having internal control to promptly detect, give early warning, prevent, and remedy errors and inadequacies.
- Promote the strength of the CJ Gemadept cooperation and other joint ventures.
- Continue to promote the strength of centralized governance, strengthen the role of risk management in each field, appropriately supporting the activities of the units.
- Continue to participate in and coordinate the implementation of the Company's projects following the BSC-KPIs program.
- Follow up the implementation of remedial and improvement after inspection.
- Summarize the assessment report of the risk management control system, supplement and complete internal audit regulations and procedures as prescribed, coordinate independent inspection and evaluation.
The Company's risk management will continue to be improved and perfected to adapt to the changes, expansion and development of the Company, while at the same time enhance the confidence of Investors and Shareholders when accompanying the Company on its sustainable development journey.