Annual Report 2012 - IOI Group

RISKMANAGEMENTThe Group’s activities expose it to a variety of risks, includingoperating and financial risks. The Group’s overall risk managementobjective is to ensure that the Group creates value for itsshareholders whilst minimising potential adverse effects on itsperformance and positions. The Group operates within anestablished risk management framework and clearly definedpolicies and guidelines that are approved by the Board.Under the Group’s Enterprise Risk Management framework, theGroup has relevant policies and guidelines on risk reporting anddisclosure which cover the following principal risks:FINANCIAL RISK• The Group is exposed to various financial risks relating tocredit, liquidity, interest rates, foreign currency exchangerates, and commodity prices. The Group’s risk managementobjectives and policies coupled with the requiredquantitative and qualitative disclosures relating to itsfinancial risks are set out in Note 42 to the financialstatements on pages 213 to 247.OPERATING RISK• The Group’s policy is to assume operating risks that arewithin its core businesses and competencies to manage.Operating risk management ranges from managing strategicoperating risk to managing diverse day-to-day operationalrisk.• The management of the Group’s day-to-day operational risk(such as those relating to health & safety, quality, production,marketing & distribution and statutory compliance) is mainlydecentralised at the business unit level and guided byapproved standard operating procedures. Operational risksthat cut across the organisation (such as those relating tosupply chain, environmental sustainability, integratedsystems, transfer pricing and reputation) are coordinatedcentrally.Annual Report 2012IOI CORPORATION BERHAD 97