Risk management is an integral part of CRCT Group’s business at both the strategic and operational
level. A proactive approach towards risk management supports the attainment of CRCT Group’s
business objective and corporate strategy, thereby creating and preserving value.
The Manager of CRCT Group (Manager) recognises that risk management is about opportunities as
much as it is about threats. To capitalise on opportunities, the Manager 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. The Manager therefore takes
risks in a prudent manner for justifiable business reasons.
The Board of Directors of the Manager (Board) is responsible for the governance of risk across CRCT
Group. The responsibilities include determining CRCT Group’s risk appetite, overseeing CRCT
Group’s Enterprise Risk Management (ERM) Framework, regularly reviewing CRCT Group’s risk
profile, material risks and mitigation strategies, and ensuring the effectiveness of risk management
policies and procedures. For these purposes, it is assisted by the Audit Committee (AC) which
provides dedicated oversight of risk management at the Board level.
The AC comprises four independent board members and meets on a quarterly basis. The meetings
are regularly attended by the CEO as well as key management staff.
The Board has approved CRCT Group’s risk appetite which determines the nature and extent of
material risks which CRCT Group is willing to take to achieve its strategic objectives. CRCT Group’s
Risk Appetite (RAS) is expressed via formal high level and overarching statements. Having
considered key stakeholders’ interests, the RAS sets out explicit, forward-looking views of the CRCT
Group’s desired risk profile and is aligned to CRCT Group’s strategy and business plans.
ENTERPRISE RISK MANAGEMENT FRAMEWORK
ERM Framework
Risk Strategy
Board Oversight & Senior Management Involvement
Internal Control System
Independent Review & Audit
Risk
Identification
& Assessment
Risk Monitoring
& Reporting
Risk
Response
• Key Risk Indicators
Risk-Aware Culture
• Accept
• Avoid
• Mitigate
• Transfer
• Risk Appetite
• Risk & Control
Self-Assessment
• Investment Risk Evaluation
• Scenario Analysis
• Whistle-blowing/
Business Malpractice
CRCT Group’s ERM Framework sets out the required environmental and organisational components
which enable CRCT Group to manage risks in an integrated, systematic and consistent manner. The
ERM Framework and related risk management policies are reviewed annually and are periodically
validated by external ERM consultants.
Enterprise Risk Management
44 | CapitaRetail China Trust Annual Report 2014
