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COSCO Corporation (Singapore) Limited
INTRODUCTION
Risk management and internal controls have been
the main focus of the various objectives of the
CorporateGovernanceCouncil (“CGCouncil”) to raise
the standard of corporate governance in its recent
Code of Corporate Governance (“CG Code”) revision.
In the 2012 CG Code, the CG Council introduces the
revised Principle 11 to focus on Risk Management
and Internal Controls. Immediately on 10 May 2012,
a Risk Governance Guidance for Listed Boards was
also released by CG Council. These efforts by CG
Council are aiming at providing detail guidance to
listed companies’ board and management on risk
management which aims to ultimately contribute to
better and sustained value to investors, raise investor
confidence and enhance Singapore’s reputation as a
leading and trusted international financial center.
At COSCO Corporation (Singapore) Limited, the
Board of Directors (“Board”) believes that good
corporate governance is an effectual balance of
promoting the long-term success of the Company
and providing accountability and control systems
which are symmetric with risks involved. It is
essential to facilitate effective, entrepreneurial and
prudent management.
The Board has delegated the risk management
and internal controls of the Group to an Enterprise
Risk Management Committee (“ERMC”). In the
ever changing business environment, the risk
management process of the Group is constantly
reviewed and updated by the ERMC. The risk
management process is aiming to identifying
the risk factors that may have a material impact
on the Group’s operation, and to manage them
appropriately.
The Company has adopted an Enterprise Risk
Management Policy in August 2012 aims to:
s PROVIDE A CONSISTENT AND STRUCTURED PHILOSOPHY
and process in managing COSCO’s risks;
s ENABLE A UNIFORM APPROACH IN PRIORITIZING
managing, monitoring and mitigating COSCO’s
risks; and
s ESTABLISH CLEAR RESPONSIBILITIES LINES OF AUTHORITY
accountabilities and decision making processes.
With the above policy, the risks identification and
management have been carried out and placed
under the purview of the ERMC.
The material risk factors identified by the Group’s
risk management process are set out below. Each of
these could have a material and adverse impact on
the Group, including its business, financial condition,
results of operation and prospect. These risk factors
have been divided into four categories: external;
internal; execution and financial.
RISK MANAGEMENT PROCESS
The ERMC has delegated the day-to-daymanagement
of risk within the Group to the Risk Management
Committee (“RMC”) of each of its operating
subsidiaries and each RMC comprises senior
management staff of the respective division within
the operating subsidiaries.
The ERMC also engages Deloitte & Touche Enterprise
Risk Services Pte Ltd to perform strategic risk profiling
in the Group’s major subsidiaries. As the Group’s
enterprise risk management program is a long-term
initiative that calls for commitment and inputs from
various stakeholders, the enterprise risk management
policies have been implemented in phases with
guidance from Deloitte & Touche Enterprise Risk
Services Pte Ltd in a systematic manner and coupled
with constant education and training of local
management staff and risk owners.
TheBoard currently conducts periodical reviews of the
risks and it identifies the key risks for the year ahead
to stay current with the ever-changing operating
environment. As part of this review, operational
and strategic risks are proposed as key risks by the
RMC, based on inputs from regions, function heads
and business leaders. The risk factors set out below
reflect the key risks identified. Each of the key risks is
assigned to the Chairman of the RMC at the operating
subsidiaries who proposes a level of risk the Group
is willing to take and develops appropriate action
plans to mitigate the risks. All risk mitigation plans are
reviewed and agreed by the Board.
RISK
MANAGEMENT
Corporate Gover nance and Transparency