Page 42 - ar2013

40 Clarity CapitaRetail China Trust Annual Report 2013
Risk Assessment and
Management
Enterprise Risk Management
(ERM) Framework
Risk Management is an integral
part of CRCT’s and its subsidaries’
(CRCT Group) business culture
whether at a strategic or
operational level. Through proactive
risk management, which supports
CRCT’s business objectives, value
is created and preserved.
The Board of Directors of the
Manager of CRCT (Board) is
responsible for the governance
of risk. It is assisted by the Audit
Committee (AC) to provide
an overview of risk management at
the board level. The AC meets on
a quarterly basis. The meetings are
attended by the Chief Executive
Officer of the Manager of CRCT as
well as other key management staff.
CRCT Group recognises that
risk management is about
opportunities as much as threats.
To capitalise on opportunities,
CRCT Group has to take risks.
Therefore, risk management is not
about pursuing risk minimisation
as a goal but rather optimising
the risk-reward relationship, within
known and agreed risk appetite
levels. CRCT Group will therefore
take risks in a prudent manner for
justifiable business reasons.
CRCT Group has adopted an
Enterprise Risk Management
framework (ERM) that enables it
to manage risks in an integrated,
systematic and consistent manner.
As a foundation to this framework,
CRCT Group aims to create a
risk-aware culture which embeds
prudent risk-taking in decision-
making and business processes.
A robust internal control system
and an effective independent audit
review process are the twin pillars
that underpin the ERM framework,
addressing financial, operational,
compliance and information
technology risks to safeguard
Unitholders’ interests and the CRCT
Group’s assets, and also to manage
risks. The line management is
responsible for the design and
implementation of effective
internal controls using a risk-based
approach. The Internal Audit
function carries out independent
reviews to test the design and
implementation to provide
reasonable assurance to AC on
the adequacy and effectiveness of
the internal control system. CRCT
Group conducts assessment of its
risks and control environment. Key
risks and their associated controls
are consolidated and reviewed at
the Group level before they are
presented to the AC.
CRCT Group effectively manages
its risk by maintaining a prudent
risk profile through a risk analysis
framework that seeks to identify,
measure and mitigate any key risk
where possible. CRCT Group
strives to achieve an optimised
risk-return relationship and ensure
that stakeholders’ interests and
values are protected.
Independent Review and Audit
Internal Controls System
Risk-Aware Culture
ERM Framework
Risk Strategy
Board Oversight & Senior Management Involvement
Risk
Identification
& Assessment
Risk Monitoring
& Reporting
Risk
Response
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Enterprise
Risk Management