5.
Exposure to credit risks
The Group is exposed to credit risks of its customers. From time to time, in the ordinary course of business,
certain customers may default on their payment. Such events may arise due to the inherent risk from
its customers’ business, risk pertaining to the political, economic, social and legal environment of its
customers’ jurisdiction and foreign exchange risk. However, the Group regularly reviews its exposure by
way of monthly management reports, market feedbacks, performing checks on customers’ financial status
and executes necessary payment recovery measures to minimize its credit risks.
6.
Foreign exchange exposure
The Group’s core assets and raw materials are primarily in U.S dollar denominated currency whereas
manufacturing and related expenses are in the currency of the country of operation. The Group has a
policy of monitoring the foreign currency exchange rates changes closely so as to minimize any potential
material adverse impact on its financial performance. The Group enters into short-term, forward contracts
as and when it deems appropriate.
7.
Liquidity risk
To ensure that it has adequate funding to achieve these requirements and its long term goals, the Group
regularly monitors its capital expenditure to ensure an appropriate rate of returns, monitors the efficiency
of the investment and pursues new financing opportunities to supplement its current capital resources.
8.
Changes in the political, social and economic conditions
The Group’s manufacturing facilities are located mainly in China. Any unfavorable changes in the political,
social, legal, regulatory and economic conditions in the PRC may disrupt our operations and affect our
financial performance.
Regulatory changes could result in increased costs to the Group. The Group continues to evaluate and
monitor developments with respect to new and proposed rules and regulations by the local authorities
in the different provinces in the PRC which can or may affect the Group in any way, and cannot predict
or estimate the amount of additional costs the Group may incur or the timing of such costs.
CORPORATE SOCIAL RESPONSIBILITY
As part of our corporate social responsibility, the Company continue to play its part in ensuring energy
conservation in our plants and offices by cutting down on our energy usage. This helps mitigate climate change
and save costs for the Group. Posters are put up at prominent places in the plants to remind workers to conserve
energy and reduction in water consumption. We adopt good human resource policies and practices that promote
fairness, safe working conditions and encourage teamwork, which is one of the Company’s Core Value.
Our ongoing focus on safety and security, encompassing the reduction of accidents, sick leave and environmental
damage, is keeping us on a steady course towards a more sustainable business.
I N N O T E K L I M I T E D
A N N U A L R E P O R T 2 0 1 5
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CORPORATE
GOVERNANCE REPORT
