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All praise goes to Allah the Lord of Universes.
It has been real privilege to work under our lecturer, Encik Ismail Bin Ibrahim who has
been a wise facilitator of our learning and development during the Risk Management (FIN 610)
subject. Thanks to his warm and cool personality, thanks for his unfailing guidance, valuable
suggestions, advice and useful criticism for setting us on the path to being an effective students
and for always saying yes-even when he was busy and tired. As a matter of fact, if it had not
been for his help and understanding, this report would not have been possible. Our debt to his
leadership, guidance, and support can never be adequately expressed with words. Suffice to
say that we are regarding his as our role model of whom we will always be appreciating.
Instead of that, our deepest thankfulness and gratitude to Mr Lim Soon Huat, the
Manager of Merison (M) Sdn Bhd, the independent distributor of Nestle (Malaysia), for the
territory of Melaka. He has given a very good cooperation and gave all information that we need
during the interview for the purpose of our research.
Our thanks go to our families, thank you for all their prayers and for their emotional
support which gave us strength and determination to continue our report. A special word of
appreciation goes to Universiti Teknologi Mara Kampus Bandaraya Melaka, for allowing us to
pursue our Bachelor in Accountancy (Hons), and for the facilities offered here.
Our thanks are also extended to all our friends, especially for all group members for the
effort given during the process of doing this group project paper and also special gratitude
particularly for our classmates BACC 8A and other classes in the same FIN 610 course and who
assisted us in one way or another during the period of this.
To all those whom we may have forgotten to mention, THANK YOU!




The purpose of our research study is to identify any risks associated in a company and
how they manage the risks. This project is undertaken for the subject of Risk Management (FIN
610) as for completing our Bachelor of Accountancy. From the discussion with all group
members, we have decided to choose Nestle (M) Bhd for our research on this Risk
Management subject. It is an independent distributor for Nestle Product for the area of Cheng,
Melaka. In order to complete our research, we have conducted an interview with Manager of
Merison (M) Sdn Bhd.
As we know, Nestle (Malaysia) Berhad is an investment holding company. It is a large
company which has two segments under it business including of food beverages products and
also other nutrition products. Under Nestle (Malaysia) Berhad, there are several distributors
which are located in many countries in Malaysia. One of the distributors in Melaka is Merison
(M) Sdn Bhd which is managed by Mr. Lim Soon Huat.
In order to finish our report, we have to understand first the concept of risk and what is
meant by risk. Risk is a situation that involving exposure to any danger. On the other hand, the
meaning of risk management is the process of identifying the potential risks, evaluating and
analyzing the risks and also the techniques on how to manage the risks. Risks are come from
different types and originate from different situations. The several types of risk are business
risks, liquidity risks, financial risks, and sovereign risks, insurance and so on. These risks have
to be identified first. After these risks have been identified, then we can measure and analyze
the risks in order to minimize the possible loss. Once we have analyzed the risks, we can select
an implement any method or technique to reduce or eliminate these risks. The measurement of
risks are being taken in order the business can run the business smoothly a can minimize any
possible losses.



a consideration should be given to available loss control measures such as risk retention or risk transfer. the risk management officer in a company must have knowledge on how to identify any risks that being associated with the company. 4. while others can cause serious damage that can be costly and time consuming to repair. the appropriate risk management techniques must be implemented to ensure that the operations of the company is going smoothly and any risks occurred can be manage well.There are several objectives of our research. These techniques must be implemented to minimize the possible loss. Running a business can be a dangerous occupation of different kind of risks. The third one is selecting and implementing the risk management decision as well as monitoring and reviewing the risk management process. Besides that. However. reduction and also avoidance technique must be taken in the trading industry distributor in order to minimize and eliminate the risks without an adverse effect on the goals of the business. Some of these potential hazards can destroy a business. we have made detailed study and research on this distributor of international food and beverages in order to get sufficient and correct information. the risk management process must be reviewed and monitored in order to ensure that all parties in the organization have complied with the requirement. In order to evaluate these risks. we have to evaluate and analyze the risks associated. The first objective is to identify any risks that are associated with the trading company. for the risks that cannot be avoided. Despite the risks implicit in doing business. However. In order to identify these risks. As the risks identified must be dealt with specific ways. these risks must be evaluated and analyzed in a proper way in order to minimize any possible loss that can occur. After the risks is being identified. The second one is evaluating the risks and analyzing the risks that are associated with the trading company. Loss prevention. the risks that were associated in trading company did not always the same as the other company. evaluating and analyzed. we have got the information from the Managing Director and also from online research.0 SCOPE OF LIMITATION OF STUDY 3 . Once the risks are been identified.

There are several limitations that we faced in order to complete our research. Instead of that. it is a very crucial and difficult for us to find the company. arrange for an interview and find the suitable time to make the interview with manager. food and so on. Furthermore. This situation has brought difficulties for us to start our research. The expenses incurred during the travel are petrol. As a student. Besides that. we have to borrow car from our classmate. we have to send our report to the shop that provides printing services. we have also a problem to find a company to do this research. as nobody in our group do not have a printer. quizzes and other events to do and to attend to. 4 . tests. Some of them said that they do not give any information to outsiders and some of them told us that they do not provide any information to student for doing any research. The first one is the time consuming to finish our research. We also have to face with other assignments. Lim. the Managing Director. We need to travel from our campus to Cheng to make an interview with Mr. This is because. it is a challenging for us to manage and arrange our time so that we can finish and complete this report. we have also to incur some cost of travelling to the company which is located at Cheng which is quite far from our campus. Therefore. As nobody in our group members having a car. we have many fieldworks that we have to conduct. we have tried to call many companies but many of them have rejected our request to make an interview. This also has contributed to the cost limitation for us to handle. As we are part 8 student of Bachelor of Accountancy.

5 . Mr. The first method that we used is through the analyzing the document. review from articles. Through the analyzing of these data.0 RESEARCH METHODOLOGY In order to complete our research. In the conversation. We have the opportunity to observe the operation of the premise. Instead of analyzing the document and conducting an interview. the sprinkler system installed in the warehouse and also the logistic system. Lim was having a meeting in Kuala Lumpur. a Managing director of the distributor Nestle (Malaysia) Bhd. we have gather information through the newspapers. we have found the information about the company such as company background. From the website of the company. Lim is the owner of the company. many researches are found from the internet and we can find much information from that source. These references are from the competent experts in the risk management industry. we have also found the information from the internet. we have also conducted an interview with Mr. Furthermore. This observation have give us clear understanding of the business operation instead of explanation that have been given by Mr. we have made twice appointment with the manager. He is managing the family business since he has a wide knowledge on the food and beverages product. So we have to come back another day after we have talked to him through a phone call. we have also made a direct observation the warehouse of the business. In order to conduct this interview. Lim.5. The first time we came. we have set the interview time in a week earlier. we have used several methods to collect all the information needed. Mr. the core business and other related information regarding the risk management. references of Risk Management books and also the text books as well. As we know. Besides that. We have also explained to him on the scope of what we are going to ask during the interview session so that he will be more prepared to give us the sufficient information. Lim regarding their operation of business. we have understanding and having a discussion with our group members on how to deal with the risks in the trading industry. journals. In this project.

We started our journey at 8. we have borrowed our friend car and collect our team member at their house as we cannot gather at one place due to transportation limitation.6. She bring us to waiting room as Mr Lim Soon Huat. She told us about the meeting of Nestle was held in Kuala Lumpur yesterday and that is why the appointment was made on that day. At the time of our arrival. we have meet Mrs Yong Siew Fong who are the executive of Nestle distributor to pick us up at the outside of the building. The meeting was held on the manager office himself.00am in the morning at his office on 6 th December 2013.50am.0 FINDING We have called Nestle office number to make an appointment to meet representative.30am and reached Merison (M) Sdn Bhd at 8. On that day. We waited for 15 minutes before Mr Lim Soon Huat pleased us. We had set the appointment to meet the Manager at 9. 6 . the Managing Director of Merison (M) Sdn Bhd do not arrive at his office yet.

The interview session has last for 1 and half hours.We have been taken to 2nd floor which the manager office are situated.00am. The session of the interview started with introducing our self and explanation about our purpose of interview. We went out from Merison (M) Sdn Bhd at approximately 11. risk control and risk financing. We have given the letter from UiTM as it is a standard procedure to be done to overcome any misunderstanding. After that. we continue our interview session regarding risk assessment include identification of risk. Mr Lim explained to us about the company background and scope of work as the independent distributor of Nestle. After that. 7 .

Melaka which is 15 minutes away from Melaka city. Yeo Hiap Seng (Yeo's) and is one of the independent distributors for Nestle Bhd products in Melaka. The company address is Plot 2-24. As we know. Merison (M) Sdn Bhd believes that their people are their greatest and most valuable asset. Founded in year 1999. Segamat and Seremban. Kawasan Perindustrian Cheng. and the Merison (M) Sdn Bhd strive to create an environment for them to succeed in career and life. but more importantly. Procter & Gamble (M) Sdn Bhd. In the same way their people strive for the Company's success. 8. Poeple at Merison Marketing are benefited not only by well-rounded compensation packages. It is a large company which has two segments under it business including of food beverages products and also other nutrition products. Nestle (Malaysia) Berhad is an investment holding company. opportunities to obtain professional training to build their capabilities. partnering top companies such as. 75250 Melaka. The company situated in Cheng.7. The company is managed by Mr.0 RISK ANALYSIS 8 . with four branches in Johor Bahru. with 13 years’ experience in the fast moving consumer goods (FMCG) line.0 COMPANY BACKGROUND Merison Marketing Sdn Bhd is located in Melaka. Jalan Ttc 8. Batu Pahat. the Manager of the company. Lim Soon Huat. Dutch Lady Milk Industries. Mukim Cheng. Kraft Malaysia Sdn Bhd. Merison (M) Sdn Bhd is one of the largest and established distributor in the Southern region of Malaysia. A simple belief. and now.

Information regarding to the business are also recorded. There are several techniques used by Merison (M) Sdn Bhd in identifying risk. all the data are also being recorded and physically kept as for the evidence in the futures. documented and properly kept as for the reference by the management itself. Interview Another technique to identify the risk is by interview. Among the technique are discussed below. as it will not consume a lot of cost in term of 9 . Analysis of document Analyzing the document is one of the effective techniques in identifying the risk. and also for external parties. related to the past activities.8. such as auditors and the Nestle (Malaysia) Bhd. as well as the current in order to analyze the existing and potential risk of the company. strategic planning and also the decision making by the management. To ensure the reliability. It is important to risk management of the company to successfully identify most appropriate techniques to be used as it is one of the important parts in the management. review and anticipate possible risks that the company might faces in carrying out the daily business activities. The management of Merison (M) Sdn Bhd used this technique to analyze the risk from the document that is being recoded and properly kept. Documents are being analyzed thoroughly in order to obtain sufficient and reliable information from the past and current activities that are properly being recorded and kept by the management. These documents contain all the data and information. Choose the right technique eventually help the company to identify perils and severity of the risks. ii. This technique also useful as it helps to investigate resources allocation. This is also another effective way to obtain any information related to any particular issues. accuracy and usefulness of the information. i. as well as analyze the potential losses that might be arose from the risk. It is a procedure to deliberately analyze.1 Techniques of identification of risk Risk identification techniques are refers to the process of identifying dangerous or hazardous situations and trying to characterize it.

iii. All information from the interview regarding to the risk analysis is properly recorded and taken into consideration for further investigation and discussion with the and time. Since the company. 10 . From the inspections. Throughout his time in managing the business. Mr. is well aware of his responsibility in identifying the risk occurs in his business. up to the management personnel (supervisors). Merison (M) Sdn Bhd is a small company and also independent distributor of Nestle (Malaysia) Bhd. He well understands of the organization missions and visions. objective and the functional department. he has developed sufficient skills. manager of sales and distribution department of the company. starting from the bottom line employee (distributor).Lim had done many interviews in order to analyze and recognize any risk that are arising from the sales and distribution department. The information gain from the interview are also said to be unbiased since the information is obtained directly from the interviewee by the interviewer. iv. Mr. The manager. there is no risk manager for the company. Mr.Lim. it has been part of Nestle (Malaysia) Berhad responsibility in recognising the importance of risk management and internal controls. Inspection Inspection is another technique that can be used in identifying the risk. As an authorized dealer for Nestle (Malaysia) Berhad. it helps him in identification of risk along with the suggestions of managing the risks. as well as having the face-to-face conversation with the workers on the floors. knowledge and expertise regarding the overall operations of the organization to ensure the data and information that he gained could be used in identifying the risk associated to the business.Lim does the inspection once every two week at the warehouse that enables him to understand the whole picture of the risk environment in the business. Inspection process is done by any authorize personnel from time to time in any areas of the business. checking whether is there any risk associated with the business and also controlling the business daily activities to ensure the efficiency and effectiveness of the business. Orientation Another risk technique is also one of the methods that can be used in identifying the risk in the business.

8. monitor and report the principal business risks faced by the Group on an on-going basis.2 RISK FACTORS Once the appropriate technique to identify the risk faces by the company. 11 .the Board of Nestle (Malaysia) Berhad has established a structured risk management framework to identify. control. Below are the risk that have been identifies from the research. evaluate. it is easy for the management to list down those risks and analyze it.

iv. The property such as office buildings. Such business activities like Merison (M) Sdn Bhd faces risk of loss or damages of the company property from variety of perils such as flood. books and documents are those items that are exposed to the damages and loss. warehouse. This is a common situation of risk for a trading business as it involved day-to-day transaction with the customers. Credit risk Credit risk refers to the risk that a customer will default on any type of debt by failing to make payments which it is obligated to do within the credit limits term. office equipment and valuable papers. people and systems or from external events. It is a form of risk that summarizes the risks a company undertakes when it attempts to operate within a given industry. many criminal losses from this criminal risk cannot be detected obviously by the company. inventory. 8. Crime risk can be avoided by the company. furniture. in which it is not under the management control.3 UNIQUE RISK OF TRADING INDUSTRY 12 . ii. fire. iii. Operational risk Merison (M) Sdn Bhd also exposed to the operational risk whereby it is a risk of loss resulting from inadequate or failed internal processes. Property risk One of the most crucial risks that the company faces is the property risk. however it is hard for the company to controlled and predict this risk since this criminal risk derive from the criminal act of person.i. from consumer to business entities where credit risk arise when the debtor (consumer and business) failed to pay trade invoice when it due. Crime risk Crime risk is one of the risks that are commonly faces by any trading company. earthquake and others. Eventually.

compliance risk Nestle (Malaysia) Berhad. ii. it will affecting Marrison (M) Sdn Bhd business in distributing the products to the customers. it will affected the equity investment Marrison (M) Sdn Bhd as they has contributed and invested certain amount of money in Nestle (Malaysia) Berhad. Halal non. including procurement of raw materials and ingredients. Malaysia as an Islamic country is the only country in the world whereby the government provides full support in promoting the Halal Certification process on products and services. Marrison (M) Sdn Bhd is exposed to this risk if they failed to comply with Halal certification rules and principles. there are some possibilities of the risk arising from entering into a partnership for the purpose of undertaking or participating in a particular financing or general business activity as described in the contract. It is also called as unsystematic risk or idiosyncratic risk. Bhd. From that. i. and which can normally be reduced by diversifying the investment portfolio. Nestle Sdn. It also affects the sensitivity of Muslim community not only to the distributed area but also the whole country. Equity investment risk Marrison (M) Sdn Bhd is legally binding to contractual agreement towards Nestle (Malaysia) Berhad as an authorized distributer of Nestle (Malaysia) Berhad products.0 WAYS TO OVERCOME RISK CONTROL 13 . is also exposed to some unique risk for example regarding the Halal noncompliance risk and equity investment risk. logistics and transportation.Unique risk is exposure to loss associated with a specific investment or investment strategy. 9. Let say if anything happened to Nestle (Malaysia) Berhad. But if Nestle (Malaysia) Berhad failed to complied with Halal requirements at all stages of the production and supply chain. packaging and labeling.

The sprinkler sprays water forcefully over the flames. Their impact is to reduce the level of retained losses. the risk of financing cost especially important if the insurance premium is based on loss experience of the organization and the annual cost of risk incurred by the company. the air temperature above the fire rises and the sprinkler activates when the air temperature gets high enough. such as technical and non-technical aspects of the business. and other policies that may impact the well-being of the firm. manage and reduce or eliminate risks. This is to provide best counter protection over any occurrence of fire at workplace. the fire sprinkler system is always "on call". cost of financing loss (insurance premium). Risk control takes that information gained during risk assessments and develops and applies changes to control the risks. Because the water is always in the piping. a network of piping filled with water under pressure is installed behind the walls and ceilings. How this system works by.9. Property risk control Merison (M) Sdn Bhd has taken some precautionary actions to avoid property risk from happen. Cost of risk includes the cost of losses that occurred and are retained. The objective of a risk control programme is to minimize the total cost of risk of an organization and to ensure the long term economic survival of the organization after the occurrence of a major loss event. Effective risk control strategies reduce the frequency and severity of losses. and implementing changes to reduce risk in these areas. Risk control can involve the implementation of new polices and standards. financial policies. If fire breaks out. In this case. i. 14 . and individual sprinklers are placed along the piping to protect the areas beneath them. Risk control is an important action taken by firms that is intended to proactively identify. physical changes and procedural changes that can reduce or eliminate certain risks within the business. Reducing cost of risk incurred will increase the profit and the organization’s shareholder value in the long run.1 THROUGH RISK ASSESSMENT Risk control refers to method by which firms evaluate potential losses and take action to reduce or eliminate such threats. Risk control is a technique that utilizes findings from risk assessments by identifying potential risk factors in a firm's operations. the company itself was made an Installation of Automatic Sprinkler System. and cost of implementing risks control measures.

Sprinklers are so effective because they react so quickly. flames and smoke produced. deluge and combined dry pipe as well as pre-action sprinkler systems. ii. This measurement can focuses on the prevention and minimization of losses from such crimes. robbery. allowing people the time to evacuate from the burning place and fire sprinkler systems release approximately 10-25 gallons of water per minute. pre-action. This installation of sprinkler system comes with a very efficient alarm system attached to the whole business premise. Maintenance. its construction and the hazards involved. Crime risk control Merison (M) Sdn Bhd have implemented some measurement to prevent any crimes such as theft. the system is doing well and minimal inspection and maintenance are required. Merison (M) Sdn Bhd also has installed this automatic fire sprinkler system really close to its warehouse where they locate the inventories and also in the office buildings where the entire important document are located. Until now.extinguishing them completely in most cases. inspection and review of this system are regularly done to ensure this system is functioning all the time. each system must at least have one water supply. or at least controlling the heat and limiting the development of toxic smoke. In industrialization sector. However. embezzlement and fraud committed by employees. In this case. 15 . Each system type may have several configurations depending on the manufacturer and special requirements. there are 5 common sprinkler systems used today. They reduce the risk of death or injury from a fire because they dramatically reduce the heat. dry pipe. They are wet pipe. The selection of a system to be used by particular business organization depends largely on the nature of the area to be protected. control valve piping in order to flow the water throughout the structure and sprinkler heads to discharge the water. This installation of sprinkler system may cater to reduce the risk of spreading the fire to the whole business premise and convenient because there are availability of sources of water supply around the premise.

Merison (M) Sdn Bhd have experienced faced credit risk in term of difficulty to obtain loan and refining the existing loan. they have maintained a good credit score to get trust by the lenders in getting loan and refinance their existing loans. so Merison (M) Sdn Bhd will continue distribute their product to that customers. 3. bars and similar devices avoid or delay access by the burglars. So. Installation of CCTV The company is being installed with CCTV especially in area which potential to be a crimes areas. The security guard help in monitoring and guarding the premises area in timely basis or based on the alarm. we have been informed that the company usually reviews of recent credit history of their customers before make distribution of their products to those particular customers. grates. 4. Physical protection for premises area The installation of good locks. 2. a business can’t pay their employee's earned wages when due and a business or consumer does not pay a trade invoice when due and others. If the retailer have a perfect payment history in the past twelve months.1. A credit score is a number that helps 16 . Credit risk control Marrison (M) Sdn Bhd also faced credit risk such as late payment by the small retailer and other customers. iii. Installation of alarm system and using of security guard The alarm help in detecting any action to access premises area by unauthorized person. it can discourage the criminals to do crimes as they could be caught for their actions. Through the CCTV. In our interview. Effective prevention procedures The company provides training for employees of the procedures in handling money and stocks to avoid theft and fraud.

there is a forklift driving restrictions imposed to the forklift drivers such as limited speed and other mechanism. only certain personnel are authorized to gain access to the accounting and documentation system of the organization. only personnel are authorized to have access to the business’s accounting system to avoid any manipulation of information. The full report will show a lender which credit products contribute to the score. But a credit score alone doesn't tell the whole story of the company’s credit history. Late payments will be shown by month. Also. 1) Limited Access Control The organization has imposed a limited access to the company’s property. For example. a bank can consider those circumstances or incidents when assessing that person reliability. system and assets to only authorized personnel only. It is focusing on the risks arising from the people. These are all highlighted by the organization as to prevent any accidents and disruptions from occurring that may affect the 17 . Operational risk control Merison (M) Sdn Bhd also exposed to the operational risk which is a risk incurred by an organization’s internal activities. which will tell them whether it is a chronic problem or a one-time issue. For example.lenders evaluate a person's credit report and estimate the company’s credit risk. iv. especially if that person has been current with payments since. For example. For Merison (M) Sdn Bhd. 2) Proper Guidelines and Regulations for Forklift Drivers Merison (M) Sdn Bhd set strict guidelines in handling the forklift to load and unload the inventories from the trucks. Lim. There have been a strict guidelines and regulations being provided to emphasize on this matter. systems and processes through which a company operates. if a person is late with credit card payments three months in a row two years ago when you were in the hospital. Mr. the manager of Merison (M) Sdn Bhd said that keeping current credit situation under control is the first step in rebuilding the credit history. access into warehouse also only allowed to certain personnel to prevent theft.

Example training fire awareness that conduct by Merison (M) Sdn Bhd is fire drill. By that. fire awareness. the performance of the forklift drivers are monitored by supervisor to obtain insightful view on the usefulness of the implementation of loss prevention measures being implemented.2 THROUGH TRAINING General awareness General awareness is necessary to provide the employees with the relevant knowledge regarding health and safety measures that needs to be implemented in their work operations. This general awareness includes of environmental awareness. they pay back with loyalty. To ensure its effectiveness. Thus.0 RISK FINANCING A variety of uncertainties are challenging development interventions on a daily basis. it is vital for one company to develop risk management in the organizations as it is crucial in managing risk that could happen. Different categories of risk 18 . and electrical awareness. The necessity and demand for increased effectiveness and efficiency of these interventions is greater than ever. The training itself help in risk control by makes the employees feel that they are part of your company family. The training provided by Merison (M) Sdn Bhd is continuously and ongoing to ensure it provide a great and comfortable place for employees to work. 10. crimes risk such as fraud and theft by the employee can be avoided. 9. When the employees realize that the employer is investing in them. Through training it can increases the motivation of employees as knowledgeable employees make fewer mistakes which reduce the risks. Training programs demonstrate the employer interested in their employees' professional development or skill enhancement.

ii. the organisations are responsible for the loss but the financial loss will be reimbursed by the indemnity payment from the insurer under insurance contract. The main criteria are to maximize returns and minimize risks related to any decision. Risks that cannot be avoided or reduced are normally retain as there are no way to deal with it. Risk Retention Risk retention refers to the use of an organisation’s internal funds to finance the loss. . The medium are: 19 . Safety environment and good health of the employee will bring greatest benefit for the business. The primary objective of any organization is to maximize wealth. i. Risk financing is a planning process to arrange for funds that are reliable and cost effective to finance losses that might happen.given different impact to the organization follow the degree of the risk. In the event of loss. good risk assessment and management will make an organization able to reduce the tendency of loss if there are any risk intervention occurs in the company. Therefore. In addition. risk financing plays a key role in the provision of fund to finance the recovery of the organizations to continue normal business interruptions caused by major accidental events or disaster. Risk Transfer Risk transfer enables an organisation to transfer its financial responsibility for a potential loss to an insurer which is insurance transfer who agrees to indemnify the organisation for the loss. as well as actually paying for losses that do occur. Such recovery is crucial for company going concern and pursue organizational objective. Merison (M) Sdn Bhd uses several medium to transfer the risk of the company rather than retain the risk. Risk financing will make the employee feel protected from any accident and the company can recover from any losses and the good name of the company can be maintain. Risk retention includes paying losses as current expenses and established reserve and captive insurance arrangement.

ii. Employment Provident Fund (EPF) Employees Provident Fund is a compulsory savings scheme in Malaysia. Insurance (Zurich Insurance Malaysia Berhad) Merison (M) Sdn Bhd have chosen Zurich Malaysia Malaysia Berhad as their insurance for the company and employee. 20 . Employees of Merison (M) Sdn Bhd are eligible for this benefit. provision of artificial aids and rehabilitation to employees to reduce the sufferings and to provide financial guarantees and protection to the family. The insurance will cover any losses and this will enlighten the burden of the company. This insurance will be contingency plan for the company if there are accident occur which may incurred losses for the company. employment or contract. Every company is required to contribute SOCSO for its employees. The employee of Merison (M) Sdn Bhd is entitled to the employment injury scheme of the Social Security Organisations (SOCSO). Merison (M) Sdn Bhd have paid specific amount of premium to Zurich as this amount are sufficient enough in order to cater the sale of Nestle’s product in certain selected region in Melaka Darul Azim. permanent or temporary. iii. Its primary aim is to provide a measure of security for old age retirement to its members. Employee can withdraw the money from their account for their own use such as for purchasing house and medical payment but with certain condition must be fulfil and at the specific time. whether they are full or part time. It also provides supplementary benefits to members to utilize part of their savings for house ownership and other withdrawal schemes. SOCSO The Social Security Organization provides social security protection by social insurance including medical and cash benefits.a) SOCSO b) EPF c) Insurance (Zurich Insurance Malaysia Berhad) i. A company must remit the contribution sum to SOCSO Office before the end of the following month. All employees will be protected under this scheme if there any accident occurs and the employees and their family will get benefit from it.

0 CONCLUSION As a summary. it will eliminate certain uncertainty that may become the factor for company that stop them take risk in certain area. The model of effective risk management to be made as reference for the business owner as well as to all of the staff in the organization to give them some ideas about risk management at the workplace portray in illustration to facilitate their understanding. Lim Soon Huat. monitoring and review and risk treatment. it is very crucial to instill the knowledge among 21 . Thus. He also pointed out that. this will promote company business and increased overall company business productivity 11. They have implemented the model of effective risk management the model of effective risk management in order to ensure the company’s sustainability. The elements including in the model of effective risk management are risk identification. risk analysis / assessment. From the research and interview we have conducted with Mr. has shown their credibility and accountability in its risk management. Marrison (M) Sdn Bhd according to him.As for employee. the manager of independent distributor of Nestle Sdn Bhd. Merison (M) Sdn Bhd also provides insurance so that all employees will be covered if there any accident happen in the workplace that cause injury or death. theft and misappropriation of inventory and cash among the employees. it will give confident to the company to be more risk taker as by having insurance covered. Nestle Sdn. As for the business. the challenges including the risk of burglary. This will make all employee of Merison (M) Sdn Bhd feel protected from any discomfort at the workplace. Bhd. So. and the biggest challenge that the companies have to face is actually managing their personnel.

travelers.zurich.0 REFRENCES Book Risk Management (2011) –Second Edition text http://www. Ainon Yon Bahiah Wan Aris.investopedia.the management and importantly to the employees so that the company is concerns about these risks and have taken proper measures to manage such risks to avoid any potential losses and damages. Hayati Mohd Dahan.aspx 22 . Besides that. Ang Chung Hwa. 12.asp https://www. all of the personnel also must be made aware and well-educated on all aspects regarding the risks management so that they can know how important it is in the organization’s objective to achieve greater performance and effects in their risk management strategy and plan. it is important to get the cooperation and commitment from the personnel as they are the drivers and heart of the organization. Zuriah Abdul Tan Liam Seng. Website http://www.

drj.asp http://www. APPENDICES 23 .htm 13.

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