Fundamentals of Risk Management

BBC: Internal controls assurance
We reviewed the effectiveness of the system of internal controls, taking account of the findings from 
internal and external audit reports. Our work in this area was influenced by the reports from the 
Director of Risk and Assurance on the effectiveness of internal control, identified frauds, and losses 
and assurance mapping.
We sought assurance from management that control issues identified by internal audit are being 
addressed. We considered the audit assurance over implementation of actions from a number of 
recent high-profile independent reviews in areas such as severance pay, freelancer tax treatment, 
child protection and whistleblowing arrangements. We considered the audit assurance over a 
number of high-profile implementation and change programmes concerning the upgrade of underlying 
IT systems and introduction of improved financial control processes.

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Risk strategy
We considered the processes for managing significant risks within the BBC and the BBC’s risk 
appetite in the context of its key strategic and operating risks and how the BBC is managing its key 
strategic projects.
We continue to have an ongoing interest in project assurance so that we can ensure that the 
lessons learnt from previous projects are taken forward. Our review of the internal audit plan 
considered how audit work on project assurance was integrated with management’s own project 
assurance activities. We satisfied ourselves that ongoing project assurance activity covers both 
governance and technical assurances.
Edited extract from BBC
Annual Report and Accounts 2014/15
Emperor Watch & Jewellery: Risk management
The risk management process includes risk identification, risk evaluation, risk management measures, 
and risk control and review. The management is delegated to identify, analyse, evaluate, respond, 
monitor and communicate risks associated with any activity, function or process within its scope of 
responsibility and authority. It is endeavoured to evaluate and compare the level of risk against 
predetermined acceptable levels of risk.
For risk control and monitoring, it involves making decisions regarding which risks are acceptable 
and how to address those that are not. The management will develop contingency plans for possible 
loss scenarios. Accidents and other situations involving loss or near-loss will be investigated and 
properly documented as part of the effort to manage risks.
The group is subject to certain risks that affect its ability to operate and protect assets. The key 
risks identified and their respective strategies are set out below:
1 
Reliance on tourism of HK/Macau/Singapore:
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change business model;
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expand business to domestic consumer market by adjusting shop locations;
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adjust stock portfolio to more affordable products to suit domestic consumers.
2 
Economic, political and social conditions in HK/Macau/Singapore (eg strong HKD against other 
currencies, continued austerity initiatives in the PRC):
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explore opportunities to develop networks in other countries;
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be cautious in purchasing and stock replenishment;
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relocate shops in the PRC;
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develop and maintain multi-tier targeted customer segments.
3 
Reliance on major watch suppliers and watch brands:
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continuously expand jewellery business;
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maintain strong and close relationship with watch suppliers;
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keep a wider portfolio on brands.
4 
Rental increment on retail shops:
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bargain for rental negotiation or rental concession;
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take advantage of coming trend in rental drop in prime shopping areas to maintain a 
balanced presence in strategically favourable geographical areas.
Edited extract from Emperor Watch 
& Jewellery Limited
Annual Report 2015

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