With the core goal of building a world-class management system, Handa Industries deeply integrates efficient governance with operational excellence, establishing a modern governance system encompassing the trinity of "strategy, compliance, and risk control." We strictly adhere to international compliance management standards, continuously improve our risk management framework, and continuously conduct global industry benchmarking activities, systematically covering 28 key performance indicators across six dimensions. Furthermore, we have established a standardized management system encompassing "systems, processes, and standards," implemented a PDCA cycle optimization mechanism, and, supported by a digital intelligent management platform, continuously promoted the online management of business processes. This has resulted in a 30% increase in overall management efficiency, forming a modern Industries management model that combines international compliance with the characteristics of "Made in China," providing solid governance and operational support for our global strategic layout.

Strategic Management

Based on the company's actual development, we have refined our development strategy, formulated detailed goals and paths, strengthened strategic communication and consensus, and clarified the strategic responsibilities and goals of headquarters and each production base. At the same time, we are actively promoting strategic execution: expanding production capacity as planned, rationally deploying new projects, and optimizing existing processes; increasing investment in digital and intelligent development, promoting digital transformation in all aspects, and building an intelligent operations system; formulating a comprehensive talent strategy, strengthening training and recruitment, and optimizing incentive mechanisms to provide talent support for strategic implementation and achieve sustainable development.

Compliance Operations

Handa Industries continuously strengthens its global compliance operations system, centered on integrity and compliance. This system covers legal review of major decisions, special investigations of overseas investments, and full-cycle intellectual property management. Through a digital compliance platform, Handa Industries enables online review of corporate seals and other items. In our global operations, we implement overseas compliance systems, develop localized compliance standards, and conduct legal education training to ensure zero violations at our overseas bases in Myanmar, Egypt, and Bangladesh. As an industry benchmark for compliance, Handa Industries has maintained zero major risk events and a 100% overseas certification pass rate, safeguarding its high-quality development with the highest standards of business ethics.

Risk Management

In the complex environment of ongoing business operations, Handa is fully aware of the potential impact of various risks on development and has always closely integrated risk management with sustainable development.

At the governance level, a multi-level risk management system has been established. The Board of Directors and its Strategic Committee coordinate group-level risk management and plan risk prevention and control directions from a strategic perspective. The Internal Audit Department is a permanent institution that continuously monitors and dynamically evaluates the effectiveness of risk management to ensure standardized operation of all links.

At the operational level, Handa has established a three-line risk control management system characterized by "customer orientation, business drive, and full process coverage," focusing on preventing systemic risks. By rapidly responding to market changes, Handa has achieved rapid business growth while keeping risks within a reasonable range, ensuring the company's steady progress in the face of fierce market competition. At the same time, Handa has established an internal control framework system centered on four control levers: the belief system, the boundary system, the diagnostic control system, and the interactive control system.Achieve a balance between strategic goals and risks through control mechanisms at different levels, fundamentally building a strong line of defense for the Industries.

Handa attaches great importance to risk assessment, comprehensively identifying and quantitatively analyzing multi-dimensional risk factors such as environmental, economic, and social factors. Based on the Plan, Do, Check, Act (PDCA) cycle management model, it pragmatically promotes important sustainable development projects, helping Industriesachieve long-term and stable development in a complex and changing market environment.

Major Industries risks and controls

Handa Industries's internal control levers 

Internal control: internal control self-inspection, internal control self-assessment, internal control audit

Strengthen red line management

Handa optimizes red line management with the goal of "scientific system, rigid execution, and cultural self-discipline". Through democratic decision-making, systematic training, and long-term supervision, it builds a new corporate compliance ecosystem and establishes a solid bottom line for risk prevention and control.

In October 2024, Handa Industries held a staff representative meeting. After thorough discussion and deliberation by all representatives, the meeting unanimously adopted the "Handa Management Guidelines for Prohibiting Crossing 'Red Lines'." The guidelines cover multi-dimensional "red line" behavioral norms, including financial integrity, information security, and safe production. Employee representatives actively raised questions and exchanged views on the details of the guidelines, fostering a democratic management atmosphere of "jointly discussing systems and mutually agreeing on rules."

To promote the effective implementation of the guidelines, the company has carried out "special training on the red line system". Through case analysis, scenario simulation, interactive Q&A and other forms, combined with examinations to test learning outcomes, it strengthens employees' awareness of behavioral boundaries and guides employees from "knowing the red line" to "guarding the red line", laying a solid foundation for rules to build a safe and efficient working environment.

Anti-commercial bribery and anti-corruption

Handa Industries strictly adheres to relevant laws and regulations against commercial bribery and corruption, continuously improves its integrity and compliance management system, and has established systems such as the "Handa Employee Code of Professional Conduct" to comprehensively regulate the business practices of employees, management, and partners. Furthermore, Handa regularly organizes special integrity training, strengthens all employees' awareness of discipline through case analysis and compliance testing, and signs "Integrity Commitment Letters" and "Integrity Promotion Agreements" with employees and partners, embedding integrity requirements into professional behavior and cooperation processes. Through a comprehensive management system of "system development + training and promotion + agreement constraints," Handa continues to strengthen its integrity defenses, foster a clean and upright business environment, and provide a solid foundation for the company's sustainable development.

Financial Management

Focusing on refined control throughout the entire process, the company continuously improves its financial management system to ensure rigorous and efficient financial operations. By continuously refining its budget management mechanism, establishing a closed-loop system encompassing strategic objectives, cost forecasting, and dynamic control, and utilizing big data analytics tools to enhance budget accuracy, the company embeds cost control nodes throughout the entire business process, achieving a deep alignment between resource allocation and strategic objectives, laying the data foundation for value creation.

In terms of fund management, we are implementing a centralized control model, leveraging a digital platform to integrate fund pools and monitor fund flows in real time, ensuring both fund security and improving cross-departmental allocation efficiency. For large-scale fund expenditures, we have established a strategic fit assessment mechanism, strengthening oversight from the perspectives of compliance, profitability, and long-term strategic adaptability, ensuring transparency and traceability of every expenditure and supporting the long-term development of the company.

In terms of cash flow management, the company has established a "full-cycle dynamic monitoring + agile scheduling" system to ensure capital chain security and operational vitality. By establishing a customer credit rating mechanism and utilizing digital tools to shorten the collection cycle, a multi-dimensional early warning model has been established for operating and investment activities to monitor abnormal cash flows in real time.

Comprehensive budget management training

In the pursuit of sustainable corporate development, Handa prioritizes the deep synergy between management capabilities and strategic execution. In 2024, the company organized a comprehensive budget management training program focused on its comprehensive budget management system. Through a variety of interactive activities, including theoretical explanations, case studies, and hands-on practice, the program guided management and core business personnel to gain a deep understanding of budget target decomposition, compilation logic, and dynamic monitoring mechanisms. The training included a live demonstration session on "strategic goals versus budget indicators." Departments held group discussions based on their actual work, developing cross-dimensional budget optimization plans covering finance, business operations, and compliance. This effectively translated strategic guidance into actionable budget language, fueling efficient resource allocation and risk management for the company.