Risk Management

CTCI has established a complete enterprise risk management (ERM) and formed cross-functional "Risk Management Executive Committee" and formulated "Risk Management Regulations" to actually regulate the risk management in each department and project.

Risk Management Structure

The Risk Management Implementation Procedures

Building Corporate Risk Awareness

To ensure that all potential risks can be effectively managed, each risk management unit should carry out at least one risk evaluation every 6 months. At the same time, all employees of CTCI should shoulder the responsibility of reporting risks.

CTCI Engineering Risk Management Training

2016 Total

2017 Total

Goals in 2018

Training hours

25,726

20,495

-

Participants (person-times)

7,605

7,907

-

Attendance (person-times)

7,584

7,860

-

Coverage rate

99.7% *

99.4% *

100%

* The coverage rate is defined as "attendance" divided by "participants of training" (it was defined as net number of trainees/total number of employees last year).

* The HSE training course is of three-hour duration over three years. Employees can complete three hours of training over three years, so the coverage rate is less than 100%.

Emerging Risks

In the face of even more stringent environmental standards and regulations, the opportunities of new hydrocarbon plants project have decreased with the cost and technology threshold raised as well. In this highly competitive environment, CTCI will draw up new strategies to strive for new projects and meet the target contract value.

During 2017, raw material prices bounced back; basic metal's annual rate of change reached 20%. In 2018, global economy shows a sign of recovery, and the supply and demand of raw material undergo changes, adding that USD goes weak after the US tax reform, it is estimated that raw material prices will be rising, causing risks to EPC projects, and cutting the Company's profits as a result.

With global climate change and the rising of environmental awareness, the Company is moving towards environmentally-friendly and sustainable management.

Proactively expanding into new regional markets, and extending our reach from China, India, Thailand, Malaysia and the Middle East into the US, the Commonwealth of Independent States and Indonesia in order to pursue our business strategy of stable revenue in the long term.

Expanding front-end design projects to acquire a potential Front-End Engineering Design (FEED) project list from business owners in advance. Focusing on critical projects to make early deployment and increasing the opportunities of successful tenders.

Expanding new business lines to acquire cutting- edge technology to access to new business field, and promoting CTCI's existing innovative process to compete for new contracts.

To respond to the trend of energy transformation and find a new blue ocean, CTCI expands our vertical and horizontal business scopes, and enters potential markets, such as long-term care services, solar power businesses and artificial intelligence.

CTCI has continued to monitor the trend of price of goods, and taken necessary measures to avoid risks, as we have requested all proposal projects to include inflation risk cost into consideration to minimize the impact of price fluctuation.

CTCI has initiated the management of water resource and carbon emissions. In projects, CTCI uses the water-saving network and clean production process, expands green areas, and reduces emissions and noise, in order to create an excellent construction environment. These measures can prevent from opposition and demonstration of local residents, which may hinder project schedules and increase the overall costs.