RISK MANAGEMENT STRATEGIES
The Group has established a framework for risk management to identify, assess and manage potential
risks and opportunities and to assist management in making informed decisions. The Group adopts a
proactive approach to managing risk of financial losses, breaches in legal and regulatory requirements,
negative impact to customers and loss of business opportunities.
The Group regularly reviews the level of risk exposure in the following key risk areas which the Group
operates in:
• Legal and Country Risk
The Group has established subsidiaries operating in different countries. These overseas
subsidiaries are exposed to changes in governmental regulations and unfavourable political
developments, which may limit the realisation of business opportunities and investments in
those countries.
Risks arising from non compliance with applicable laws and regulations are managed with the
assistance of the Group’s external legal advisers. Where the Group is active or has an operating
presence in a foreign jurisdiction, legal counsel from that foreign jurisdiction is sought where
appropriate. The operating head of the business unit is responsible for compliance with the
applicable laws in the country of operations.
The Group’s business operations are also exposed to uncertainties of the global economy and
international capital markets. To prepare for the fluctuations in external environment, the Board
and the management consistently keep themselves up-to-date on the changes in political and
industry regulations so as to implement appropriate measures against any adverse changes in
market conditions in an efficient and timely manner.
• Operational Risk
Operational risk is the potential loss caused by a breakdown in internal process, deficiencies
in people and management, or operational failure arising from external events. The Group’s
operational risk is managed at each operating unit and monitored at the Group level. Whilst
operational risk cannot be eliminated completely, the Group evaluates the options available by
weighing the cost and effectiveness of each measure taken to minimize risk exposure. The Group
has put in place operating manuals, standard operating procedures, delegation of authority
threshold to optimise operational efficiency and a regular reporting structure for both operational
and financial reporting. Independent checks are carried out by the Group’s Internal Auditors on
the Group’s internal controls and risk management process to ensure their effectiveness and
adequacy. Where appropriate, the Group maintains sufficient insurance coverage for those areas
exposed to risks, taking into account the risk profile of the business in which it operates.
• Financial Risk
The Group’s financial risk management objectives and policies are set out on pages 147 to 153
of this Annual Report. Financial risk includes market risk such as interest rate risk and foreign
exchange rate risk, as well as credit risk and liquidity risk.
• Investment Risk
The Group evaluates any investment proposals for potential ventures and business acquisitions
by conducting due diligence exercises and comparing to benchmarked rate of return taking into
consideration the Group’s level of risk exposure. All investment proposals are subject to the
Board’s approval with post-investment reviews being conducted to monitor and mitigate the risk
of non-performing investments.
ASL Marine Holdings Ltd.
Annual Report 2016
55
