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Enterprise Risk Management
(1) Overall risk management philosophy of the company;
IRC Properties, Inc. aims to identify, measure, analyze, monitor, and control all forms of risks that would affect the Company. It is an integral part of the planning and operations process of the Company in order to meet corporate goals and objectives.
(2) A statement that the directors have reviewed the effectiveness of the risk management system and commenting on the adequacy thereof;
The Board of Directors through the Audit Committee is tasked to review the effectiveness of the risk management system the Company employs. In the Audited Financial Statements which the Board and the shareholders approve each year, it says, among others, that “The Management, under the direction of the Board of Directors of the Group is responsible for the management of financial risks. Its objective is to minimize the adverse impacts on the Group’s financial performance due to the unpredictability of financial markets.”
(3) Period covered by the review;
The Audit Committee periodically reviews the Company’s risk management system.
(4) How often the risk management system is reviewed and the directors’ criteria for assessing its effectiveness;
The adequacy of the risk management system is reviewed annually by the Audit Committee. On a quarterly basis, specific risk management processes and findings are reviewed and evaluated.
Risk Policy
(a) Company
A general description of the company’s risk management policy, setting out and assessing the risk/s covered by the system (ranked according to priority), along with the objective behind the policy for each kind of risk:
(b) Group
A general description of the Group’s risk management policy, setting out and assessing the risk/s covered by the system (ranked according to priority), along with the objective behind the policy for each kind of risk:
Foreign Currency Risk
Risk Management Policy
The Company closely monitors the HK and US dollar rates vis-à-vis Philippine Peso since it has foreign currency loans payable in US and HK dollars.
Objective
To avoid or minimize loss associated with foreign currency fluctuations.
Liquidity Risk
Risk Management Policy
The Company monitors its cash position and make cash projections to ensure that obligations are met as they fall due.
Objective
To minimize risk of not being able to meet funding obligations.
Interest Rate Risk
Risk Management Policy
The Company borrows at fixed interest rates.
Objective
To manage interest cost.
Credit Risk
Risk Management Policy
The Company deposits its available funds only to reputable and stable banks.
Objective
To maintain a high grade of credit quality if the Company’s financials assets.
Equity Price Risk
Risk Management Policy
Movement in the Company’s share price is monitored on a daily basis.
Objective
To determine the impact of the Company’s share price on its financial position.
(c) Minority Shareholders
The principal risk of the exercise of controlling shareholders’ voting power:
Risk to Minority Shareholders
Due to statutory limitations on the obligations of majority shareholders with respect to minority shareholders, minority shareholders are subject to the risk of the exercise by the majority shareholders of their voting power. However, the Corporation Code provides for minority shareholders’ protection in certain instances wherein a vote by the shareholders representing at least two-thirds of the Corporation’s outstanding capital stock is required. The Corporation Code also grants shareholders an appraisal right allowing a dissenting shareholder to require a corporation to purchase his share in certain instances.
Control System Set Up
(a) Company
A brief description of the control systems set up to assess, manage and control the main issue/s faced by the company:
Risk Exposures
Risk Management Policy
The Company regularly monitors and measures the risk exposure of the Company.
Objective
Continuous improvement of information system and internal controls within the Company.
(b) Committee
The committee or any other body of corporate governance in charge of laying down and supervising these control mechanisms, and give details of its functions:
Audit Committee
Control Mechanism
Oversight of the integrity of the financial statements and related disclosures.
Oversight, assessment and review of internal controls.
Details of its Function
Reviews the external auditor’s findings on internal controls. Recommends to the Board the appointment or re-appointment of external auditors.
Reviews the quality and reliability of information prepared for inclusion in financial reports.