Uncertainty is common in business, both from the internal and external environment. This can have a negative effect on the achievement of company goals. Uncertainty is a business risk, which will continue to increase amid changes in the increasingly dynamic business climate. Therefore, PT Panca Global Kapital Tbk applies a risk management mechanism to increase addedvalue to stakeholders.

Sound risk management has proven to be effective in helping the Company mitigate the risks that exist in its operational activities, especially related to matters relating to securities underwriting, provision of financing facilities, securities portfolio management carried out by the Company.

Risk Management a least includes:

• Identify potential internal risks in each function/unit and potential external risks that may effect the Company’s performance.

• Develop a risk management strategy.

• Implement management programs to reduce risk.

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Business Risk

     1. Macroeconomic Risk

Macroeconomic risk is the risk that arises in connection with changes in national economic conditions that have a direct of indirect effect on the Company’s performance. That risk may arise as a results of external factors, such as the global financial crisis that affects the domestic economy.

Macroeconomic factors that can have a negative effect include changes in interest rates, national economic growth rates, inflation rates and the exchange rate of the rupiah against foreign currencies.

Macroeconomic factors that can have a negative effect include changes in interest rates, national economic growth rates, inflation rates and the exchange rate of the rupiah against foreign currencies.

These factors also have a serious impact and can reduce the Company’s revenue f this happens, then business targets and profitability cannot be achieved.

     2. Compliance Risk

Compliance Risk is the risk that the Company does not comply with and/or does not implement the applicable laws and regulations. In addition, if there is a violation of one of the provisions, the risk that may occur is the imposition of sanctions for the Company which can be in the form of financial sanctions in the form of material fines. Or non-financial sanctions in the form of written warnings, sanctions for inadequacy and incompetence (fit&proper test) of the Company’s Board of Directors or freezing of certain business activities, and loss of reputation. This can have a negative effect on the Company both financially and non-financially.

 

     3. Legal Risk

Legal Risk is a risk caused by weak juridical aspects, which are caused, among others, by lawsuits, absence of supporting laws and regulations, or weak engagements such as non-fulfillment of the terms of a valid contract and imperfect binding of collateral. Several factors affect legal risk, including lawsuits from third parties for transcations carried out and errors/omissions in making contracts/agreements.

This risk will not only have an impact on the disruption of the smooth operation of operations,, it will also cause an increase in costs that are detrimental to the eCompany and have a negative impact on the Company’s profits.

 

     4. Strategic Risk

Strategic Risk a Risk due to inacurrency in making and/or implementing a strategic decision and failure to anticipate changes in the business environment.

 

If in preparing strategic planning, which is generally stated in the Business Plan, an error occurs, it can result in not achieving the company’s goals, including not achieving financial targets/projections as expected, due to improrer businesss planning.

This risk can also be said to be caused by the establishment and implementation of the Company’s strategy that is not appropriate, making inappropriate business decisions, or the Company’s lack of responsiveness to external changes. This risk will not only have an impact on increasing operating expenses which in turn will affect the level of profit and performance of the Company, it will also have a negative impact on the level of health of the Company.

The procedures and implementation of the Company’s operations must be adjusted to the laws and regulations that are constantly being updated. Failure to anticipate these policy changes can have a negative impact on the Company’s performance, which of course will affect the Company’s health level.

 

Risk Management System Effectiveness

The Company’s risk management is carried out at any time according to the type of risk that exists. Supervision is carried out by taking into account all possible risks, both preventable and non-preventable.

 

Statements of The Adequacy of The Risk Management System

The Board of Directors and Board of Commissioners assess that the risk management system in the Company is adequate and running effectively.