Risk Management

Building Resilience for Sustainable Value Creation

At AWC, effective risk management is fundamental to achieving sustainable growth, protecting stakeholder value, and strengthening long-term business resilience. The Company integrates Enterprise Risk Management (ERM) into strategic planning, business operations, investment decisions, and sustainability management to proactively identify, assess, manage, monitor, and report risks that may affect the achievement of business objectives.

AWC's Enterprise Risk Management Framework is aligned with internationally recognized principles, including the COSO Enterprise Risk Management Framework, supporting effective governance, informed decision-making, and sustainable value creation. The Company also promotes a strong risk culture by embedding risk awareness and accountability throughout the organization.

RISK GOVERNANCE STRUCTURE

The Board of Directors has overall responsibility for overseeing the Company's Enterprise Risk Management Framework and ensuring that significant risks are managed in line with the Company's strategic objectives and risk appetite.

The Risk Management Committee, established by the Board of Directors and comprising members of the Board, oversees the implementation and effectiveness of the Company's Enterprise Risk Management Framework.

The Enterprise Risk Management Subcommittee (MRMC–MACO for RMC), comprising senior executives from business units and corporate functions, supports the implementation of the Company's risk management framework by translating strategic direction into operational actions, coordinating enterprise risk management across business units, monitoring key risks, and facilitating consistent risk management practices across the organization.

The Risk Management Division coordinates enterprise risk management activities across the organization and supports business units in implementing the Company's risk management framework.

To strengthen risk governance and promote a proactive risk culture, AWC regularly provides risk management training and updates to the Board of Directors and relevant management on emerging risks, regulatory developments, and leading risk management practices.

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THREE LINES MODEL

Clear Roles and Responsibilities

AWC adopts the Three Lines Model to clearly define roles and responsibilities for risk management and internal control across the organization.

First Line

Business units, risk owners and process owners are responsible for identifying, assessing, managing, and monitoring risks arising from their day-to-day operations while implementing appropriate internal controls.

Second Line

The Risk Management Division, Compliance, and relevant supporting functions establish policies, provide guidance, monitor enterprise risks, and oversee the effectiveness of risk management practices across the organization.

Third Line

The Internal Audit Office provides independent assurance on the effectiveness of governance, enterprise risk management, and internal control processes under the oversight of the Audit Committee.

ENTERPRISE RISK MANAGEMENT FRAMEWORK

A Structured and Integrated Approach

AWC applies an Enterprise Risk Management Framework aligned with internationally recognized principles, including the COSO Enterprise Risk Management Framework, to systematically manage risks across the organization.

Risks are identified, assessed, evaluated, and prioritized based on their likelihood and potential impact in accordance with the Company's risk appetite. Appropriate mitigation measures are established to manage risks within acceptable levels while supporting the achievement of strategic objectives and sustainable business growth.

Risk management is integrated into strategic planning, business operations, investment decisions, and sustainability management to support informed decision-making and organizational resilience.

OUR RISK MANAGEMENT APPROACH

Risk Management Process

AWC applies a structured and continuous risk management process to identify, assess, evaluate, mitigate, monitor, and review risks across the organization. Risks are assessed based on their likelihood and potential impact, prioritized according to the Company's risk appetite, and managed through appropriate mitigation measures. Significant risks are regularly monitored and reported to support timely decision-making and continuous improvement.

MONITORING & CONTINUOUS IMPROVEMENT

Continuous Improvement

Risk management is an ongoing process. AWC regularly monitors and reviews its enterprise risk profile to reflect changes in the internal and external business environment. Significant risks, mitigation progress, and key risk developments are reviewed and reported to the relevant management committees and the Board of Directors at least quarterly to support timely decision-making.

The effectiveness of the Company's Enterprise Risk Management Framework and internal control processes is independently reviewed by the Internal Audit Office under the oversight of the Audit Committee, providing independent assurance and supporting the continuous enhancement of governance, risk management, and internal control practices.

To strengthen a proactive risk culture, AWC provides annual risk management training and updates to the Board of Directors. and promotes risk awareness across the organization through regular communication, knowledge sharing, and targeted training for relevant employees, enabling them to effectively manage risks within their responsibilities.

Insights and recommendations from risk reviews, internal audits, and management discussions are incorporated into the continual improvement of the Company's Enterprise Risk Management Framework, enhancing organizational resilience and supporting sustainable business growth.