STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Risk area Control measures taken to mitigate the risks • Avoid over concentration of sales and credit exposure to any customer to prevent over-dependence on any customer. • Activelymonitor theGroup’s banking facilities to ensure the facilities are sufficient to meet the Group’s working capital and capital expenditures requirement, and negotiatewith bankers for credit facilities featureswhich enable greater flexibility in the Group’s financial resources management. • Issuance of Sukuk, where necessary, to meet the Group’s funding needs. Market risks •The Group operates in a competitive environment and failure to compete effectively against its existing competitors and new market entrants will affect its performance • Established quality control procedures and project tendering guidelines to ensure quality services and products to customers, and cost efficiency. • Nurture close relationship with customers, sub-contractors and suppliers. • Establishwide range of services and products to diversify product risks and reduce reliance on any particular services or products for revenue. • Focus inmore technical demanding products and services to create amarket niche or speciality. • Bid for projects jointly with parties which have complementary strength to the Group. • Diversify base of customers, sub-contractors and suppliers. Human resource risks • The Group believes its future success largely depends on the Group’s ability to hire, develop, motivate and retain competent employees and key personnel. The Group’s key management team may be difficult to replace as they have been instrumental in the development, growth and success of the Group • Succession planning in human resources. • Competitive remuneration packages to attract, reward, retain andmotivate talents. • Appropriate training and development to nurture and groom existing staff force. • Internship program for university students to identify potential talents that the Group can employ. Corruption risks • Corruption risks exist across all business sectors, in one form or another, from bribery to extortion and embezzlement to cronyism. Corruption can have serious consequences for businesses’ financial health and reputations, impact the quality of goods and services and it can prevent businesses from achieving maximum efficiency and profitability. The Group is not spared from corruption risks • Established anAnti-Bribery andCorruptionPolicy (“ABCPolicy”) which sets out the responsibilities of the Group to comply with laws against bribery and corruption and provide guidance to the Directors, employees and business associates on standard of behaviour towhich theymust adhere to and how to recognise and deal with bribery and corruption issues. • Established Corporate Code of Conduct (“Code”) which sets out the standards which the directors, officers and employees (“Personnel”) of theGroup are expected to comply in relation to the affairs of the Group’s businesses when dealing with each other, shareholders and the broader community. This Code focuses on areas of ethical risk, provide guidance to Personnel to help them to recognize and deal with ethical issues, provide mechanisms to report unethical conduct, and help to foster a culture of honesty, integrity and accountability. • Established whistleblowing policy which provides means by which an individual can report through established channels, concerns about unethical behavior, malpractices, illegal acts or failure to comply with regulatory requirements that is taking place / has taken place / may take place in the future, without fear of reprisal or victimization, in a responsible and effective manner. • A copy of Kimlun Group’s ABC Policy, Code and Whistleblowing Policy are made available to all parties via Kimlun’s website at http://www.kimlun.com/kimluncorp/. • Declaration of actual or potential conflict of interest situation by key senior management and tender award committee. Such personnel shall abstain from decision making where there is actual or potential conflict of interest situation. • Adopts segregationof duties for job functions (i.e. financial andnonfinancial related). Designated personnel for preparing, verifying and approving each transaction/ activity is documented in written procedures. • Provide training on the requirements and obligations of anti-bribery and corruption laws and our anti-bribery and anti-corruption approach to our Personnel. Annual Repor t 2021 56
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