Risk Management and Internal Controls

Severe disruption to the business caused by acts of man or acts of nature may have adverse financial effects on the Company.

• A business recovery plan for major incidents, and other business compliance measures for specific scenarios, operational emergencies and health and safety, are in place and are regularly updated and tested.
• In response to pandemic, standard operating procedures and guidelines are in place, ensuring intensive cleaning and disinfection of our premises. Government’s requirements and guidelines on pandemic or social distancing are strictly observed.
• Strategic plans are regularly reviewed to maintain business resilience and sustainability.
• Conduct site surveys and consult professional advisors to ensure properties in earthquake and hurricane zones are built to meet the relevant building codes and safety standards.
• Purchase insurance to the extent practicable to cover financial loss due to property damage, business interruption and third-party liabilities.

Changes in the global and local political landscape and priorities may have significant impact on the business environment.

• Closely monitor social media and government policies and respond in a timely manner.
• Senior management engagement with government authorities to anticipate political developments in order to plan appropriate responses and to ensure compliance with applicable laws and regulations.
• Maintain robust corporate governance practice through oversight functions (internal audit, risk management, the company secretary, legal counsel and independent non-executive directors).

The lack of compelling development projects and business disruption may lead to a slowdown in business and so affect financial performance.

• Obtain suitable reserves of land, reinforce existing assets and actively explore investment opportunities.
• Monitor and evaluate disruptive business models, with a view to making our operations more robust.
• Enhance competitiveness by increasing efficiency, using appropriate technology and operational procedures.

The failure to maintain brand position and perception may make us less competitive.

• Crisis communication and social media policies are in place and are updated and tested regularly to ensure consistent, responsible and responsive communication (including when handling major incidents) in order to safeguard the Company’s reputation.
• Closely monitor social media in order to evaluate and provide responses to negative social media content.
• Engagement with third parties to understand their perceptions of the Company and to anticipate current and potential economic, political, social or environmental issues that may adversely affect our reputation.

Delay in the completion of developments may have an adverse financial effect by delaying the timing of property sales and leasing.

• Closely work with contractors to monitor and manage construction progress in order to avoid delays.
• Stringent contractor prequalification requirements and stringent requirements for approving design changes.
• Build in contingencies for statutory approvals and communicate with government authorities on a timely basis.

Extreme weather conditions and climate change may increase the risks of physical damage to properties and adversely affect their valuation.

• A Climate Change Policy is in place and is updated regularly.
• Conduct climate risk assessments at all portfolios.
• Science-based targets have been established to achieve long-term decarbonisation.
• Monitor and reduce carbon emissions from construction activities and embodied carbon from major building and construction materials.