STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL The key risks and some of the control measures taken to mitigate the risks for FY2022 are set out below:- Risk area Control measures taken to mitigate the risks Operational risks • As in any business, the Group is subject to operational risks which are inherent in the industry which the Group is operating such as delay in progress of construction leading to Liquidated Ascertained Damages, cost overrun, etc. • Organisation structure outlining the lines of responsibilities and authorities for planning, executing, controlling and monitoring the business operations. • Periodic operational review meetings attended by the Executive Directors, heads of departments and key management staff to consider financial and operational risks and issues of the Group as well as any management proposal. • Monitoring of actual performance against annual budget by the Board. • Relocate loyal and experienced employees to lead branches’ operations. • Engagement of specialist to provide consultancy services for technically complicated works. • Formalised whistleblowing policy, code of conduct and written policies and procedures on major processes to ensure compliance with internal control systems and relevant laws and regulations. • Appointment of staff based on the required level of qualification, experience and competency. Environmental, social and governance (“ESG”) risks • The Group faces a variety of ESG-related issues and some of them have the potential to be material and cause financial or reputational damage • Implement the guidance under Environment Management System Certification – ISO 14000:2000 in the Group’s pre-cast operation to minimise the environmental impact. • Environment Impact Assessment in relation to quarry operation and larger size development in compliance with the applicable rules and regulations. • Implement standard policies and procedures on key operation processes. • Implement Anti-Bribery and Corruption Policy (“ABC Policy”) and internal guidelines thereunder to ensure that the Group’s business is conducted in an ethical manner with integrity and honesty. • Implement the Code of Conduct (“Code”) which sets out the standards which the directors, officers and employees (“Personnel”) of the Group 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 recognise and deal with ethical issues, provide mechanisms to report unethical conduct, and help to foster a culture of honesty, integrity and accountability. • Implement 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 victimisation. • Engage independent internal audit function to provide reasonable assurance on the effectiveness of the system of internal control within the Group. Risk management process is being audited to provide assurance on the management of risks. Annual Report 2022 60
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