Page 89 - S P Setia Annual Report 2016
P. 89

S P Setia Berhad Group                                 Our Business | Our Performance Review | Our Leadership and People   87
          Annual Report 2016                                        | Our Achievements and Accolades | Our Sustainability Statement
                                                                   | Our Governance | Our Financial Statements | Other Information




                                                          Statement of Risk Management and Internal Controls


          SECOND LINE OF DEFENCE: RISK MANAGEMENT

          The second line of defence is provided by the Risk Management Department, with oversight by the Management Risk Team, which is
          responsible for monitoring the risk management activities of the Group and implementing an effective risk management framework and
          process.

          Facilitated by the Risk Management Department, the Business and Support Units’ risk registers are updated on a quarterly basis. The risk
          registers are the results of the ongoing risk assessments. The major challenges and key risks faced by the Business and Support Units
          are documented in the risk registers and they are prioritised based on the magnitude of the risks. The risk registers are submitted to the
          Management Risk Team for further review and deliberation and to make informed decisions. The Management Risk Team (chaired by the
          President and Chief Executive Officer) is a management committee that oversees the operational risks of the Group.

          On a quarterly basis, the Risk Management Department will also present the Group’s risk register and reports on significant investments,
          projects and/or Business Units to the Risk Management Committee for its review and deliberation. The Group’s risk register contains the
          key risks identified from time to time, and sets out the mitigating action plans that have been implemented to address those risks. The Risk
          Management Committee will also provide guidance and feedback on any shortcomings in the risk management system and ensure the
          appropriate mitigating controls are put in place.

          A summary of issues deliberated by the Risk Management Committee will be presented to the Board and issues requiring the Board’s
          attention will be duly highlighted.


          THIRD LINE OF DEFENCE: GROUP INTERNAL AUDIT


          The Group Internal Audit delivers the third line of defence through the provision of an independent view on the efficacy of the risk management
          and internal control systems. The Group Internal Audit undertakes regular assessment on the Group’s operations and the internal control
          systems to assess and evaluate the adequacy and efficiency of the financial and operating controls. Any gaps or weaknesses on internal
          control impacting the Business and Support Units are highlighted and recommendations are provided to strengthen the internal control
          systems.

          The Group Internal Audit will apprise the Audit Committee on a quarterly basis on significant matters that require the Audit Committee‘s
          attention. Guidance and feedback are provided by the Audit Committee to ensure all measures are put in place to strengthen the Group’s
          internal control systems.


          KEY RISKS

          In 2016, we considered the following to be the Group’s key risks. These key risks were compiled through aggregation, filtering and prioritisation
          of the risks from the Group’s perspective. The risk assessment process provides an opportunity to highlight emerging risks and/or include
          new risks into the risk registers. The risk registers also track movement of risks and their specific ratings across the Group, ensuring their
          proactive management. Details of the key risks are set out in the chart below:

                                KEY RISKS                                   KEY CONTROLS AND MANAGEMENT



          Slowdown in Market Demand
          The Group’s business is largely dependent on the performance   We constantly monitor the development and changes in the
          of the property market in the countries in which we operate. Such   conditions of the property markets we operate in when planning our
          performance is affected by, among other factors, domestic and global   future developments in order to maintain our competitiveness.
          economies and government regulations. Any adverse developments
          affecting the property markets such as the deterioration in property
          demand may also have an adverse impact on our business operations
          and financial performance.
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