RISK MANAGEMENT INTEGRATION WITH SUSTAINABILITY The Risk Management Department continues to align sustainability reporting and efforts with the Group’s entire business operations throughout the financial year, as sustainability has affected all parts of the Group, including risk. ESG metrics are used to evaluate the Group’s social responsibility and sustainability performance. The Group, with Board permission, continues to report material sustainability matters in accordance with regulatory requirements, as revealed on page 106 of the Sustainability Statement. KEY RISKS The Group’s financial performance and operations are influenced by a vast range of risk factors. We aim to mitigate the exposure through appropriate risk management strategies and internal controls. The Group’s key risks are as follows: Risks Description Risk Mitigation Market sentiment Competition risk The property development market continues to be highly competitive, and the Group is subject to competition from various property developers, including but not limited to the availability of strategically located and reasonably priced landbanks, key talents, property types and selling prices of property. The Group’s revenue is predominantly contributed by its property development segment and, therefore, would be exposed to market or systemic risk. • Rebalance product mix to incorporate more owner-occupier products and affordable landed residential with strong local demand • Commitment to integrating technology into our operations and using digital tools to minimise business interruption • Online sales tools to help sales staff and agents sell online • Strengthen digital marketing efforts using videos, advertisements, contests, and partner promotions • Offer customers appealing sales packages, financing solutions, and incentives to overcome home-buying difficulties Financial Risk The Group faces financial risk exposures from credit risk due to the inability to maintain credit ratings and liquidity risk arising from the inability to efficiently meet present and future funding obligations (both anticipated and unanticipated) as they become due. These exposures, if not addressed, may adversely affect the Group’s financial management and daily operations and may potentially incur unacceptable losses. • The Group diligently monitors and performs the following: - The cash flow forecast is reviewed weekly, while a 12-month rolling cash flow is monitored monthly - To diversify funding source/lender - Review existing projects’ cash flow requirements • The Group continues to monitor its borrowing repayment maturity profiles and financial covenants (e.g. gearing ratios are below/within the required thresholds) Regulatory Risk The Group is committed to ensuring employees, processes, and operations comply with all applicable policies and the relevant laws and regulations The Group keeps abreast of the changes and regularly updates the regulatory requirements that affect the Group’s operations, and necessary steps are taken in the form of regular discussions with our consultants, lawyers and bankers to ensure compliance KEY INTERNAL CONTROL SYSTEMS AND STRUCTURE The Board and Management of the Group have put in place the following key internal controls to ensure the Group’s objectives and operational effectiveness: 213 GOVERNANCE
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