Integrated Report 2020

RISK OVERVIEW Risk Management is fundamental to Cim Group’s strategy, profitability and to the day-to-day management of its risk-taking activities. The strategy is well-informed and shaped by an understanding of the risk landscape, including a range of significant risks and uncertainties in the external economic, competitive and regulatory environment. Any identified inherent risks to the core business activities are managed through an integrated Enterprise Risk Management (ERM) framework with the objective of adopting a prudent and disciplined approach, whilst striking an appropriate balance between risk and return. The key risk types include credit risk, market risk, liquidity risk, funding risk, business risk, operational risk and reputational risk, and these are managed effectively through an internal governance process and the use of risk management tools and processes. The Board is fully committed to establishing a sound system of risk oversight in relation to risk management, adherence to internal policies and compliance with the prudential regulatory and legal requirements. STRATEGIC AND BUSINESS OBJECTIVES (Stakeholders’ expectations) Risk Appetite Framework incorporating Board-approved top-down risk appetite statements Our approach to identification and impact assessment aims to ensure that the Group mitigates the impact of these risks on its financial results, long-term strategic goals and reputation. INTEGRATED REPORT 2020 CIM FINANCIAL SERVICES LTD Risk Management Report Assesses the credit worthiness of our customer’s ability to repay its contractual obligations Assesses the risk that the future interest income deteriorates if market rates change Ensures the Group can finance its liquidity needs through diverse funding sources in accordance with its strategy Ensures we respond to the following non- financial risks in a timely and effective way and implement appropriate control measures to ensure business integrity and continuity Operational risk Cyber Security risk Compliance risk Legal risk Credit Risk Management Market Risk Management Funding & Liquidity Risk Management Non-financial Risks Rs Rs Reputational Risk : Risk of negative impact on our books due to adverse publicity, public perception or uncontrollable events Strategic Risk : Risk of financial forfeiture arising due to unsuccessful business decisions or any unexpected loss Model Risk : Risk of loss arising from inaccurate predictions, resulting in inaccurate decisions Business Continuity Risk : Risk of loss due to disuption in normal business operations 44