Corporate Risk Management Case study:

Eastern Limited (the Company) is an exporter of die-cast toy cars to U.S. & European markets. Its assembling factory is located in Hong Kong, with a floor area of about 6,000 square meters and a workforce of 150. All the raw materials, parts and accessories are purchased from its close working partner Southern Company in Guangzhou, PRC. Upon completion of the production (mainly assembly) process, the finished toys are sold to U.S. in US dollar terms & to European countries in Euros. The biggest buyers from U.S. and Europe account for roughly 45% of its turnover to these two regions and the annual turnover from U.S. & Europe has been maintained roughly at 60:40 basis. Furthermore, in U.S., payments are made through Letters of Credit of Bank of America and in Europe, payments are made through Letters of Credit of HSBC. Being the Risk Manager of Eastern Limited, your group is asked to write a report to the Board of Directors about Risk Analysis.

You should answer in bullet point form and in simple english :

1a . analyze all possible kinds of risk to which the Company may be exposed.

1b. state which of the risks identified in the report are insurable under normal circumstances and the types of insurance contracts you will recommend

1c. suggest any measures (such as risk control & safety measures) that the Company should consider in order to control (or minimize) the risks of the Company.