Identify where the risk register is misaligned with risk appetite statement (4 appropriate area of misalignment)
provide 2 recommendations on changes to controls to address misalignment in these 4 risk categories identified
Appendix A: Risk Appetite Statement Risk category Principles and guidance Risk appetite Growth Low Kia Ora seeks to grow through the acquisition of new parks in strategic areas. Moderate Legal, Regulatory and Ethical Compliance To ensure that the Holiday Parks comply with all applicable statutory standards and societal expectations, Health and Safety Low To provide and maintain facilities, in a manner, which minimises risk to park users and park management and promotes a healthy lifestyle. Facilities Management Moderate To optimise the recreational and tourist potential and provide a range of recreation and communal facilities for guests and their visitors. Tourist Accommodation Moderate To optimise income to the Holiday Park by providing a variety of tourist accommodation with opportunities for affordable family and traditional camping guests. Cash Flow Low Kia Ora has been established to provide a return to shareholders. Fluctuations in revenue and expenditure impacts cash flow available for distribution. Interest rates Low Kia Ora is the holder of freehold land with debt required to operate the business and acquire land. Fluctuations in interest rates can lead to volatility profitability and cash flow. Appendix B: Risk Register Inherent risk assessment Residual risk assessment Risk category Risk description Likelihood Consequence Risk rating Key controls Likelihood Consequence Risk rating A Growth Likely Catastrophic Very high Possible Major High Acquisition of properties that do not deliver required rate of return for shareholders resulting financial loss. Governance and control framework with established delegation of authority enabling investment decisions to be made quickly and efficiently by CEO. Due diligence on acquisition completed where investment exceeds $5 million. B Likely Major High Unlikely Minor Low Legal, ethical and regulatory compliance Failure to comply with regulatory requirements, or failure to act in good faith when applying regulation, leading to a breach of laws or regulations and of societal expectations General Legal Counsel review and approve all contracts with liability caps included, with obligations tracked in legal database. Legal reviews all proposed legislation and updates to policies and procedures where required. Staff training presented on contract drafting and execution procedures presented monthly to all employees. c Death or serious injury to guest or Likely Major Very High Possible Medium Moderate Health and safety park staff Kia Ora maintains health and safety procedures that comply with regulatory requirements. Park managers are encouraged to run annual staff training on health and safety procedures Inherent risk assessment Residual risk assessment Risk category Risk description Likelihood Consequence Risk rating Key controls Likelihood Consequence Risk rating Kia Ora maintains access to all appropriate plant and equipment to ensure it uses the right tools for the job. D Likely Park facilities are outdated or do not attract customers to Kia Ora. Major Possible Major Facilities Management High Insufficient number of facilities at park reducing our ability to create memorable experiences for our guests. Very High Kia Ora maintains market research of options and invests in high demand facilities. Management is experienced in providing holiday park guest experiences. Policies and procedures are provided to each park manager to implement. Major Very High Possible Medium Moderate E Tourist Mix of accommodation products do Likely Accommodation not attract customers or opportunity to provide accommodation guests is lost through insufficient capacity. Kia Ora maintains market research of options and invests in high demand facilities. . F Cash Flow Possible Major High Minor Low Insufficient cash flow measured as "cashflow available for distribution to shareholders. Annual budgets are approved Possible by the board and monthly review is completed. G Interest rates Possible Major High Unlikely Medium Increased interest rates leading to reduced profitability and cash flow. Low Finance department sources the cheapest interest rate available and monitors changing rates. Appendix A: Risk Appetite Statement Risk category Principles and guidance Risk appetite Growth Low Kia Ora seeks to grow through the acquisition of new parks in strategic areas. Moderate Legal, Regulatory and Ethical Compliance To ensure that the Holiday Parks comply with all applicable statutory standards and societal expectations, Health and Safety Low To provide and maintain facilities, in a manner, which minimises risk to park users and park management and promotes a healthy lifestyle. Facilities Management Moderate To optimise the recreational and tourist potential and provide a range of recreation and communal facilities for guests and their visitors. Tourist Accommodation Moderate To optimise income to the Holiday Park by providing a variety of tourist accommodation with opportunities for affordable family and traditional camping guests. Cash Flow Low Kia Ora has been established to provide a return to shareholders. Fluctuations in revenue and expenditure impacts cash flow available for distribution. Interest rates Low Kia Ora is the holder of freehold land with debt required to operate the business and acquire land. Fluctuations in interest rates can lead to volatility profitability and cash flow. Appendix B: Risk Register Inherent risk assessment Residual risk assessment Risk category Risk description Likelihood Consequence Risk rating Key controls Likelihood Consequence Risk rating A Growth Likely Catastrophic Very high Possible Major High Acquisition of properties that do not deliver required rate of return for shareholders resulting financial loss. Governance and control framework with established delegation of authority enabling investment decisions to be made quickly and efficiently by CEO. Due diligence on acquisition completed where investment exceeds $5 million. B Likely Major High Unlikely Minor Low Legal, ethical and regulatory compliance Failure to comply with regulatory requirements, or failure to act in good faith when applying regulation, leading to a breach of laws or regulations and of societal expectations General Legal Counsel review and approve all contracts with liability caps included, with obligations tracked in legal database. Legal reviews all proposed legislation and updates to policies and procedures where required. Staff training presented on contract drafting and execution procedures presented monthly to all employees. c Death or serious injury to guest or Likely Major Very High Possible Medium Moderate Health and safety park staff Kia Ora maintains health and safety procedures that comply with regulatory requirements. Park managers are encouraged to run annual staff training on health and safety procedures Inherent risk assessment Residual risk assessment Risk category Risk description Likelihood Consequence Risk rating Key controls Likelihood Consequence Risk rating Kia Ora maintains access to all appropriate plant and equipment to ensure it uses the right tools for the job. D Likely Park facilities are outdated or do not attract customers to Kia Ora. Major Possible Major Facilities Management High Insufficient number of facilities at park reducing our ability to create memorable experiences for our guests. Very High Kia Ora maintains market research of options and invests in high demand facilities. Management is experienced in providing holiday park guest experiences. Policies and procedures are provided to each park manager to implement. Major Very High Possible Medium Moderate E Tourist Mix of accommodation products do Likely Accommodation not attract customers or opportunity to provide accommodation guests is lost through insufficient capacity. Kia Ora maintains market research of options and invests in high demand facilities. . F Cash Flow Possible Major High Minor Low Insufficient cash flow measured as "cashflow available for distribution to shareholders. Annual budgets are approved Possible by the board and monthly review is completed. G Interest rates Possible Major High Unlikely Medium Increased interest rates leading to reduced profitability and cash flow. Low Finance department sources the cheapest interest rate available and monitors changing rates
