Risk Management
Supporting the SDGs Goals
Commitment
- The company conducts its business under an effective and transparent risk management framework, aligned with the principles of good corporate governance.
- The company continuously develops and enhances its risk management processes to respond to changes in the business environment.
- The company promotes a risk awareness culture across all levels of the organization.
Goals and Performance Highlights
Goals
- Establish a risk management system and processes that comprehensively cover the organization's key risks.
- Reduce the likelihood and potential impact of risks that may affect the company's operations and reputation.
- Strengthen stakeholder confidence through systematic and effective risk management practices.
Performance in 2025
The company conducts an annual review and assessment of key organizational risks, along with establishing appropriate control measures and risk management plans.
Risk management performance is continuously monitored and reported to the Board of Directors and senior management.
The company is able to manage key risks within acceptable levels, supporting stable and sustainable business operations.
Challenges and Opportunities
The company recognizes that operating in the retail and lifestyle brand management industry involves various challenges arising from both internal and external factors. These include changes in consumer behavior, economic conditions, industry competition, technological developments, as well as evolving laws and regulatory requirements related to business operations.
Therefore, the company places strong emphasis on Enterprise Risk Management (ERM) to support the achievement of business objectives and sustainable growth. Effective risk management enables the company to anticipate potential events, mitigate impacts that may affect operations, and appropriately capture emerging business opportunities.
Management Approach and Value Creation
Risk Management Structure
The Company has established a clear risk management governance structure that operates independently from the management team. The Risk Management Working Group reports directly to the Risk Management Committee to ensure that risk management is executed efficiently and comprehensively across the entire organization. The core structure is defined as follows:
Board of Directors
The Board of Directors is responsible for overseeing the Company's risk management policy and framework, monitoring risks that may affect the Company's business, including ESG risks and climate change-related risks, as well as overseeing compliance with the Company's Code of Business Conduct.
Risk Management Committee
The Risk Management Committee is responsible for establishing the risk management framework and guidelines, reviewing risk management plans, monitoring implementation progress, and reporting to the Board of Directors.
Risk Management Working Group
The Risk Management Working Group reports directly to the Risk Management Committee. Its responsibilities include continuously monitoring the implementation of the organization's risk management activities and ensuring that all departments and employees consistently adhere to the organization's risk management framework and procedures in a standardized, appropriate, and effective manner across the organization.
In addition, the Working Group is responsible for collecting risk information from various departments, monitoring the implementation of risk mitigation measures, and regularly reporting the results and progress to the Risk Management Committee.
Furthermore, executives and employees at all levels actively serve as "Risk Owners" with the responsibility to identify and manage risks within their respective departments. Key risk indicators have been integrated into corporate performance evaluations (KPIs), covering critical areas such as cybersecurity risk and occupational health and safety risk. The Company also continuously fosters and cultivates an enterprise-wide culture of risk awareness.
Risk Management Approach
The Company has adopted the COSO ERM (Enterprise Risk Management) framework as an integral part of its business planning, strategic decision-making, and operational processes across all organizational levels. This approach ensures that risks are managed within acceptable risk appetite levels, thereby supporting stable, long-term growth.
The risk management process is structured as follows:
Risk Identification
Identifying potential risks, including ESG risks and climate change-related risks.
Risk Assessment
Evaluating risks by analyzing their probability and potential impact.
Risk Mitigation
Establishing appropriate measures and response strategies to manage and mitigate risks.
Monitoring and Reporting
Continuously tracking and reporting risk management performance.
Internal Audit
The Company has engaged Dharmniti to provide internal audit services under the supervision of the Company's Internal Audit Department, which reports directly to the Audit Committee. Internal audit reports are submitted to the Audit Committee and the Chief Executive Officer (CEO) to inform them of the audit results.
Where areas for improvement are identified, the management team reviews the relevant operating procedures and implements appropriate corrective actions. The Internal Audit Department subsequently follows up on the implementation of such corrective actions to ensure that the Company's internal control system remains adequate and effective in supporting its business operations. For 2026, the Company has an internal audit plan comprising five audit engagements, all of which have been approved by the Audit Committee.
In addition, the Company conducts an annual assessment of the adequacy of its internal control system to provide an opinion on the effectiveness and adequacy of the Company's internal controls. The assessment is based on the Internal Control Adequacy Assessment Form developed by the Office of the Securities and Exchange Commission (SEC). Based on the results of the 2025 annual assessment, the Company concluded that its internal control system adequately covers all five key components of internal control and that appropriate control mechanisms have been established in line with the nature and scale of its business.
Business Continuity Management (BCM / BCP)
The Company has established a Business Continuity Management (BCM) framework and a Business Continuity Plan (BCP)
To ensure preparedness in handling potential events that could impact business operations such as natural disasters, emergencies, or disruptions.
The core objectives are to:
- Enhance organizational preparedness to respond effectively to unexpected crises.
- Minimize adverse impacts on business operations and key stakeholders.
- Safeguard the continuity of the organization's critical business processes.
Furthermore, the Company has defined operational guidelines and mitigation measures to counter scenarios that could disrupt business activities. These plans are regularly reviewed and updated to ensure an agile and effective response to changing situations.
Promoting a Risk-Aware Organizational Culture
Tanachira Group places strong importance on fostering a risk-aware organizational culture (Risk Culture) across the company.
This begins with integrating risk management principles into the organization's core values, encouraging both executives and employees to recognize potential risks, anticipate changes that may occur in the future, and prepare appropriate responses. Such an approach helps reduce potential negative impacts on the business while maintaining the company's ability to deliver distinctive lifestyle experiences and services to customers, as well as creating long-term value for all stakeholders. In addition, the company integrates risk management concepts into operational processes at all levels of the organization. Executives and employees are encouraged to actively participate in identifying and managing risks, while continuous learning and development are promoted to strengthen the organization's ability to respond effectively to potential risks. This approach helps maintain the company's competitiveness and supports stable and sustainable growth. Tanachira Group has established guidelines and practices to promote a risk management culture across the organization, as follows:
To ensure that risk management is fully integrated into business operations and decision-making processes, the company has adopted the following practices:
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Encouraging Independent Directors to Express Their Views Openly
The company supports independent directors in providing opinions and recommendations on risk management freely, ensuring that the company receives well-rounded perspectives to support informed business decisions.
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Managing Foreign Exchange Risk in Product Imports
The company continuously assesses and manages foreign exchange risks related to product imports. Costs and profit margins are regularly reviewed in line with company policies, while currency trends are closely monitored to allow timely and appropriate strategic adjustments.
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Assessing Risks When Introducing New Brands
The Brand Committee evaluates potential risks and opportunities when considering new brands, taking into account factors such as market conditions, competition, and consumer behavior. Appropriate business plans are then developed and presented to brand partners. Through careful and structured planning, the company has successfully gained recognition from various international brands to become their official importer and distributor in Thailand.
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Monitoring the Performance of Key Projects
The company regularly monitors the performance of key projects every six months to assess progress and adjust strategies in line with changing circumstances. In the event of urgent situations, plans are revised promptly to respond effectively to evolving conditions.
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Efficient Production and Product Distribution Planning
The company ensures that product production and imports are managed at appropriate levels, with distribution plans aligned with market demand. This approach helps reduce potential waste from excess inventory and minimizes accumulated costs from overstocking.
Tanachira Group places strong emphasis on enhancing risk management knowledge among executives and employees at all levels through various training programs and activities, including the following:
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ESG Risk Management Training
The company encourages directors, executives, and employees to participate in the "ESG Risk Management" program organized by the Stock Exchange of Thailand (SET). This program enhances understanding of environmental, social, and governance risks, enabling the organization to prevent and manage potential risks more effectively.
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Embedding Risk Awareness in Daily Operations
The company communicates and provides training to ensure that employees understand the importance of risk identification and management in all work processes, including product management, customer service, and internal operations.
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Risk Alert Systems and Whistleblowing Channels
The company has established risk alert mechanisms and provides channels for employees to report potential risks or concerns. Employees are encouraged to raise such issues without fear of negative consequences, helping strengthen transparency and proactive risk management within the organization.
To maintain competitive advantages and achieve long-term sustainable growth, TANACHIRA Group has continuously implemented adaptive measures in response to evolving global trends, as follows:
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Selection of Eco-Conscious and Sustainable Brands
In response to the shifting consumer paradigm towards products and brands with sustainable management practices, the Company carefully evaluates material composition, sourcing practices, and manufacturing processes of imported brands. This ensures minimized environmental impact while aligning seamlessly with customer values.
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Supply Chain Risk Management
The Company proactively plans for potential disruptions within the logistics and transportation processes such as delays caused by natural disasters, material shortages, or regulatory changes in countries of origin. Mitigation measures are firmly established to ensure business continuity without interruption, complemented by comprehensive supplier risk assessments that encompass critical ESG parameters.
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Strategic Agility in Response to Market Dynamics
The Company continuously monitors market trends and shifting consumer behavior. This ongoing analysis enables agile adjustments of sales and marketing strategies to precisely fulfill and satisfy evolving customer needs.
Stakeholders Directly Impacted
