Enterprise Risk Management

 

Risk Management System

The Board, thru the Audit Committee, periodically reviews the effectiveness of the Company’s risk management system with emphasis on monitoring of existing and emerging risks as well as risk mitigation measures.  Risk management review is conducted annually.  A review for the period 2013 was conducted in the first quarter of the year.  Criteria used for review are compliance with controls and accuracy of identified risks and appropriateness of risk treatment plans.

 

Risk Policy

(a) Company

Risk Exposure Risk  Management Policy Objective
Country Risk (performance of the Philippine economy and political stability) Use of pre-selling as a project financing tool. Entering into joint development agreements for the acquisition of land. Minimize cash outlays for projects, control development costs and maintain a net cash position.Maximize cost efficiencies and resources.
Project Cost and Completion Risk Establish linkages with a broad base of suppliers.  Efficient project management and monitoring.  Capitalize on synergies across the Group. On-time completion of projects, efficient sourcing of construction materials.
Customer Default Risk Revenue and property diversification and product innovation.Makes available bank financing facilities to buyer on easy terms thru partner banks. Reduce collection risk

 

(b) Group

Risk Exposure Risk  Management Policy Objective
Country Risk (performance of the Philippine economy and political stability) Use of pre-selling as a project financing tool.Entering into joint development agreements for the acquisition of land. Minimize cash outlays for projects, control development costs and maintain a net cash position.Maximize cost efficiencies and resources.
Project Cost and Completion Risk Establish linkages with a broad base of suppliers.  Efficient project management and monitoring.  Capitalize on synergies across the Group On-time completion of projects, efficient sourcing of construction materials.Reduce collection risk
Customer Default Risk Revenue and property diversification and product innovation.Make available bank financing facilities to buyer on easy terms thru partner banks. Reduce collection risk

 

(c) Minority Shareholders

Risk to Minority Shareholders
The AGI Group’s voting power in the Company poses a risk to the ability of minority shareholders to influence corporate strategy.

 

Control System Set Up

(a) Company

Risk Exposure Risk Assessment

(Monitoring and Measurement Process)

Risk Management and Control

(Structures, Procedures, Actions Taken)

Country Risk Institutional reviews of the Philippine economy particularly the real property market Minimize cash outlay for projects, control development costs and maintain a net each position.

 

Maximize cost efficiencies and resources.

Project Cost and Completion Risk Project monitoring teams On-time completion of projects, efficient sourcing of construction materials.
Customer Default Risk Customer Satisfaction/Default reports Revenue and property diversification

 

Make available bank financing facilities to buyer on easy terms thru partner banks.

 

(b) Group

Risk Exposure Risk Assessment

(Monitoring and Measurement Process)

Risk Management and Control

(Structures, Procedures, Actions Taken)

Country Risk Institutional reviews of the Philippine economy particularly the real property market Minimize cash outlay for projects, control development costs and maintain a net cash position.

Maximize cost efficiencies and resources.

Project Cost and Completion Risk Project monitoring teams On-time completion of projects, efficient sourcing of construction materials.
Customer Default Risk Customer Satisfaction/Default reports Revenue and property diversification

Make available bank financing facilities to buyer on easy terms thru partner banks.

 

(c) Committee

Committee/Unit Control Mechanism Details of its Functions
Board Audit Committee Provides oversight over Management’s risk management process, financial reporting process and reviews internal audit plans.