STAMFORD TYRES CORPORATION LIMITED
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DRIVING IT UP
(ii) Product liability claims
The Group is exposed to claims from its customers from products sold by the Group which contain defects
or found to be unfit for their intended use. The Group may be required to make financial compensation to
its customers in such circumstances. The Group’s principals are well established in the market place and their
products are usually tested for safety before being marketed. The Group continues to spend considerable effort
in ensuring the quality of its products and services. The Group provides its employees with relevant training,
on a regular basis, to uphold the quality of services provided to its customers. The Group has no history of any
significant claim made by its customers.
(iii) Credit and inventory risk
The Group faces normal business risks associated with collection of trade receivables and inventory
obsolescence. The Group’s exposure to credit risks arises mainly from sales made to distributors and retailers
in various geographical locations. The Group has tight credit control policies and procedures to evaluate the
credit worthiness of customers before credit is granted and to prevent significant concentration of credit risk.
The Group also has adequate policies and procedures to minimise the risk of inventory obsolescence. The risk
of inventory obsolescence may arise from changes in consumer preference and technology. It is the Group’s
policy to maintain optimum inventory level at all times. Inventory level is monitored regularly and slow moving
inventories are quickly identified for early disposal. The Group has also put in place a ’supply chain management’
system to procure inventories in an effective manner to prevent excess inventories on hand.
The financial risk management objectives and policies are discussed in Note 35 to the financial statements.
Communication with Shareholders
Principle 14 : Shareholders’ Rights
Companies should treat all shareholders fairly and equitably, and should recognise, protect and facilitate the
exercise of shareholders’ rights, and continually review and update such governance arrangements.
Principle 15 : Communication with Shareholders
Companies should actively engage their shareholders and put in place an investor relations policy to promote
regular, effective and fair communication with shareholders.
Principle 16 : Conduct of Shareholders’ Meetings
Companies should encourage greater shareholder participation at general meetings of shareholders, and allow
shareholders the opportunity to communicate their views on various matters affecting the company.
Corporate Governance
(Cont’d)
