C A M B R I D G E I N D U S T R I A L T R U S T
A N N U A L R E P O R T 2 0 1 5
RISK MANAGEMENT
Strong Oversight and Governance
The Board of Directors of the Manager has the overall
responsibility for governing risks and ensuring that CITM
maintains a sound risk management system and internal
controls to safeguard Unitholders’ interests and CIT’s assets.
For these purposes, the Board is assisted by the Audit,
Risk Management and Compliance Committee (“ARCC”)
which provides dedicated oversight of risk management
at the Trust and Manager Level. The ARCC currently
comprises two independent and one non-executive board
members and meets on a quarterly basis. The meetings are
attended by the CEO, the COO and CFO and the Head of
Compliance of CITM.
Risk Management Process
The Manager adopts a four-step risk management process
to manage different risk by performing the following steps:
(1) Risk identification and assessment;
(2) Risk management application;
(3) Risk monitoring; and
(4) Reporting
(1) Risk Identification and assessment
The Enterprise-Risk Management (“ERM”) Risk Appetite
Statement was formulated and approved by the Board
to identify the nature and extent of key material risks
and risk appetite threshold of CIT and CITM. Both Risk
Appetite Statements are monitored on a quarterly basis
to ensure that all risks are appropriately managed. The
ERM Risk Appetite Statements are reviewed and tabled
to both the ARCC and the Board on a quarterly basis for
their notation. The metrics adopted for each measure
will be reviewed at least annually or more frequently if
the business environment warrants.
Besides using ERM Risk Appetite Statement as one
of the tools to identify and assess risks, CITM requires
respective Heads of Departments to proactively
identify, assess and document material operational risks
as well as controls and/or treatment actions needed to
address them, on a quarterly basis. The Key Risks and
Control Matrix (“Risk Matrix”) covers CIT’s and CITM’s
material operational risks, the likelihood of the risks
occurring, the consequences should they occur and the
controls put in place to mitigate or manage these risks.
The material operational risks are sub-categorised into
commercial & legal, economic/financial, operational,
technology, human resources, OHS/Environmental,
development and strategic. The Risk Matrix is reviewed
by the CEO and the COO and CFO before they are
presented to the ARCC and the Board.
(2) Risk Management Application
Besides using the ERM Risk Appetite Statement and
Risk Matrix to identify and assess the risks, CITM also
uses other tools to manage risks. The Compliance
Matrix is one such tool that lists a summary of the major
regulatory requirements related to both CITM and
CIT. It covers the Securities and Futures Act (“SFA”),
regulations (“SFR”) and related notices and guidelines,
SGX Listing Rules and the Code Of Collective
Investment Scheme (“CIS”). Identified regulations are
reviewed yearly or whenever the business environment
changes substantially or whenever there are new
relevant regulations to ensure that the matrix is kept
up-to-date.
CITM has various policies and procedures to reduce
operational risks by providing uniform practices that
serve as a basis for guidance in day-to-day operation
and to facilitate the understanding and correct
implementation of different work processes. All policies
and procedures are reviewed and updated where
relevant at least once a year to ensure they are kept up-
to-date. Any revisions, amendments and supplements
to the various policies must be approved by the Board,
the ARCC or the CEO, as appropriate.
To increase the level of awareness and knowledge of
various risks, controls requirements and processes
within CIT and CITM, all new employees are required to
undergo induction training by the various departments.
On-the-job training is provided to equip the staff with
the knowledge and skills to carry out their work. Internal
training is conducted for the purpose of information
sharing, especially on changes relating to internal
policies. Staff are encouraged to source for external
training that relate to their fields of expertise and/or
are included in personal development plans. Skills and
knowledge acquired via such training can be applied
to their work to improve work processes or control
requirements and thus effectively reduce operational
risks for CITM.
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