68 CSE GLOBAL LIMITED RISK GOVERNANCE AND INTERNAL CONTROL MANAGEMENT OF GROWTH The Group competes internationally with many firms that are substantially larger and have substantially greater financial, professional and other resources than the Group. The Group’s continued success depends on its ability to compete effectively with its competitors as well as to persuade customers to use the Group’s products and services instead of those developed in-house by the customers. The Group intends to further develop its niche markets in the energy, power and utility industries, as well as the water, wastewater and environmental industries, and the public sector. The Group intends to achieve this by offering customers industry specific knowledge and cost-effective solutions. Such a strategy has enabled the Group to enjoy significant growth in recent years as reflected in its turnover and profits. The Group has experienced rapid growth in the past few financial years in terms of the number of employees, scope of activities, geographical markets and level of technical expertise. To support the growth of its current and future projects, the Group will need to attract, motivate and retain a significant number of highly qualified professionals who have significant relevant industry experiences. As a systems integrator providing highly sophisticated information technology and industrial automation solutions and services locally and overseas, the Group requires qualified professionals who are experienced and possess the relevant skill sets. Given the exacting job specification, the pool of qualified professionals is relatively small. As such, the Group faces keen competition for such pool of qualified professionals. To manage and sustain its growth effectively, the Group must continue to expand its management team by attracting more talent and to motivate and retain such professionals at a competitive cost, as well as improve its operational efficiency and financial management. ACQUISITIONS AND DIVESTMENTS Being an acquisitive company, CSE faces challenges arising from integrating newly acquired businesses with our own operations and managing these businesses in markets where we have limited experience. The Group risks not being able to generate synergies from these acquisitions, and the acquisitions may become a drain on the Group’s management and capital resources. The Company recognises the risks associated with acquisitions. However, CSE views suitable acquisitions as the fastest way to achieve scale and will mitigate risks through pre-acquisition due diligence and carefully managed integration processes. CSE recognises that rapid growth will stretch the organisation, its infrastructure and processes, but is willing to bear the attendant risk so long as it is able to reasonably mitigate the key risks. CSE has an established process for evaluating acquisition and divestment decisions. Acquisitions are monitored to ensure they are on track in meeting the Group’s strategic objectives and investment returns. The Board guides the Group to take risks in a controlled manner, preserving the entrepreneurial spirit as well as exercising financial discipline to earn the best risk adjusted returns on invested capital. The investment portfolio is constantly monitored to ensure that performance is on track to meet the Group’s strategic objectives and investment returns. HUMAN RESOURCES CSE is committed to attracting and retaining the best talents, with the ultimate goal as a preferred employer of choice. This can be achieved by maintaining good employee relations, promoting employee engagement, enhancing talent development and fostering a conducive work environment for our employees. The Group continues to focus on strengthening and building our human capital and capabilities to support our long term and sustainable growth plans. CLIMATE-RELATED CSE recognizes the importance of managing climate-related risks which have an impact on business operations and business assets. We are committed to doing our part in reducing our carbon emissions and protecting our people and assets from the impacts of extreme weather. Climate risks for businesses can include physical and transition risks, and it is essential to anticipate and prepare for these risks, as it can help to reduce company’s exposure to potential financial losses, secure supply chains, comply with increasing regulations, and prepare for changing market demands. To remain competitive, businesses must prioritize climate risk management not just for present-day operations but also for future revenue streams and managing the cost of capital. Businesses that embrace climate risk management will likely have a greater opportunity to achieve long-term success and resilience.
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