The Group remains vigilant in managing risks and is mindful of the presence of risks in our business decisions and activities. We understand that effective risk management is critical not only to mitigate potential exposures but also to drive the successful achievement of our strategic and business objectives. Through our risk management process, we systematically identify and manage both inherent and external risks. We go beyond mere compliance by implementing policies, principles, and practices that minimise risk exposure, enhance performance, and provide greater certainty, thereby strengthening stakeholder confidence. We view risks as opportunities to reinforce our internal controls, compliance procedures, and management strategies. Identified risks are carefully assessed, mapped against their likelihood of occurrence, and evaluated based on their potential impact on UEM Edgenta’s operations. To support this approach, the Group has established a robust risk management framework that governs our risk management practices, enabling the identification, assessment, and mitigation of risks to ensure continued operational resilience. For more detailed information, please refer to pages 245 – 252 in the Statement on Risk Management and Internal Control section of this Annual Report. The key risks outlined below, while not exhaustive or listed in any specific order of priority, are those we believe could have a significant impact on our business. While these risks have been thoroughly evaluated, the Board acknowledges that the risk landscape is dynamic and constantly evolving. As such, unforeseen or emerging risks, even those that may initially seem minor, have the potential to escalate into significant challenges in the future. STRATEGIC RISK 01 Description Strategic risks are fundamental risks associated with decisions made by the Board and Management of UEM Edgenta relating to the Company’s objectives and its exposure to a dynamic market environment and evolving industry demands. These risks can significantly influence the Company’s business strategy and growth trajectory, potentially hindering the achievement of its objectives if not properly managed. Such risks arise from the changing market landscape, including industry uncertainties and emerging challenges that could affect various aspects of the business such as strategy execution, performance metrics (e.g., market share and growth), shareholder value and corporate reputation. Strategic risks often require UEM Edgenta to make informed and calculated decisions to drive business expansion and ensure long-term viability. These risks reflect the inherent challenges and uncertainties associated with pursuing growth while maintaining a competitive edge in the marketplace. • Our multinational operations exposes UEM Edgenta to a range of risks, i.e., economic volatility, evolving regulatory landscapes, geopolitical dynamics, and diverse social contexts. These factors critically influence our strategic decision-making, planning, and operational execution. • The operating landscape continued to be competitive with our customers, comprising existing, new and potential, shifting their focus requirements from traditional services requirements to value-adding services encompassing technology integration, performancebased model, and sustainability. • Clients, particularly those in industries focused on costeffectiveness, may at times underestimate the value of our services, despite their critical importance. This trend towards service commoditisation leads to heightened competition, where pricing becomes the primary driver, often overshadowing the quality and strategic value we provide. • Market dynamics continue to exert pressure on our profit margins, making it challenging to expand our revenue stream and sustain a robust and healthy order book. Context • Expansion and diversification of revenue streams through the PanMalaysia Strategy, regional growth, and entry into new adjacent sectors to broaden our addressable market. • Committed to developing and deploying innovative technology solutions that transform service delivery in healthcare and infrastructure, with the goal of establishing new industry performance standards and benchmarks of excellence. • Strategically focused on transforming our technological solutions into scalable, market-ready products that address the dynamic needs of both existing and potential clients. This approach enables us to efficiently adapt to evolving market demands, optimise our product portfolio, and drive sustainable long-term business growth. • Committed to ongoing cost rationalisation initiatives aimed at driving organisational efficiency, boosting competitiveness, and delivering enhanced value through innovative products and technology solutions. • Focused on expanding our client base through targeted crossselling initiatives and the adoption of performance-based contracting models. Additionally, we remain committed to sustaining our existing concession businesses while pursuing growth opportunities. Mitigation 67 MANAGEMENT DISCUSSION AND ANALYSIS Key Risks and Mitigation
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