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Once risk mitigation plans are agreed, each operating
subsidiary is asked to carry out a self-assessment
exercise which requires all operating units to confirm
compliance with the Group’s policies and also to confirm
that key operational controls are in place and working
effectively. The results of this exercise, together with a
review of specific plans for strategic risks, enable the
Board to confirm that the business has a sound risk-
based framework of internal controls.
The Group Auditors, internal and external, provide
independent reassurance that the standard of risk
management, compliance and control meet the needs of
the business. Group Audit status reports are discussed
with ERMC, Audit Committee and Board on a regular
basis. The Board also recognises that the risks facing
the business may sometimes change over short time
periods. Every quarter, each operating subsidiary
provides an update on new and emerging risks and
reports to update the Group’s risks are provided to the
ERMC, Audit Committee and the Board.
The Board concurred with the opinions of its sub-
committees, i.e. Audit Committee and ERMC, of the
adequacy of the internal controls system (of which
risk management is one of its crucial segments) to
addressing its financial, operational, compliance and
information technology risks in meeting the current
scope of the Group’s business operations.
It is not possible and practical to identify and anticipate
every risk that may impact the Group. While the Group’s
risk management process attempts to identify and
manage (where possible) the key risks it faces, no such
process can totally eliminate risks or guarantee that
every risk is identified, or, that it is possible, economically
viable, or prudent to manage such risks.
Consequently, there can never be an absolute assurance
against the Group failing to achieve its objectives or
a material loss arising. Some material risks may not
be known, others, even though currently deemed as
immaterial, could become material and new risks may
also emerge.
The Board affirms its overall responsibility on risk
management and to review the adequacy and integrity
of the control system on an annual basis.
1. EXTERNAL RISKS
The Group is subject to a number of external risks. The
Group defines external risks as those that stem from
factors which are mainly outside of its control. These
risks will often arise from the nature of the Group and
the industry in which it operates.
GLOBAL ECONOMIC DOWNTURN AND
UNCERTAINTIES
The global capital and credit markets have been
experiencing periods of extreme volatility and disruption.
The global economic uncertainties, concerns over
recession, inflation or deflation, energy costs, geopolitical
issues, commodity prices and the availability and cost
of credit, have contributed to unprecedented levels of
market volatility and diminished expectations for the
global economy and the capital and consumer markets.
These factors, combined with others, precipitated a
severe global economic downturn, the full extent of
which remains to be seen.
The Group is susceptible to the cyclical world-wide
demand and pricing in its industries, which are highly
dependent upon global economic condition. The
uncertainties are likely to result in a decrease in the
overall demand for vessels and risks of default by the
ship-owners in taking delivery of the vessels upon
completion.
LEGAL, REGULATORY, POLITICAL AND SOCIETAL
RISKS
The Group is at risk from significant and rapid change
in the legal systems, regulatory controls, custom and
practices in the regions in which it operates.
Political uncertainties, regime change and change in
society, including increased scrutiny of the Group, its
businesses or its industry, for example by governmental
and non-governmental organisations or the media
Corporate Governance and Transparency
