098 KIMLUN CORPORATION BERHAD • STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL The key risks and some of the control measures taken to mitigate the risks for FY2025 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. • Placement of trusted and experienced employees to lead the operations of branches. • Engagement of specialist to provide consultancy services for technically complicated works. • Formalised Whistle Blowing Policy & Procedure (“Whistle Blowing Policy”), Corporate Code of Conduct (“Code”) 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. ESG risks • The Group faces a variety of ESG-related issues and some of them are potential to be material and might cause financial or reputational damage. • Implement the guidance under Environment Management System Certification – ISO 14000:2000 in the Group’s pre-cast operations to minimise the environmental impact. • Continuous monitoring and producing quarterly reports of environment impact of quarry operations. • Conduct social impact assessment of property development projects in compliance with the applicable rules and regulations. • Appointment of consultants to advise on material ESG topics and development of materiality matrix. • Implement standard policies and procedures on key operational processes. • Implement Anti-Bribery and Anti-Corruption Policy (“ABAC 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 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 recognise and deal with ethical issues, provides mechanisms to report unethical conduct, and helps to foster a culture of honesty, integrity and accountability. • Implement Whistle Blowing Policy which provides means by which an individual can report internally through established channels, concerns about unethical behaviour, 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. • Implement Conflict of Interest (“COI”) Policy and maintain a robust framework consisting of well-defined processes and procedures to ensure that the Group’s interests are safeguarded in a situation involving COI. • Engage an independent internal audit function to provide reasonable assurance on the effectiveness of the system of internal control within the Group. The risk management process is also audited to provide assurance on the management of risks.
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