2018 UEM Edgenta Annual Report

We see risks as opportunities to strengthen our internal controls, compliance procedures and management strategies. With a robust enterprise risk management platform, we identify principal risks, classify them based on their likelihood and impact, and prioritise in keeping with the dynamic operating environment. We continuously monitor different types of risks associated with our business which can be discussed under six (6) key categories: GROUP STRATEGY - KEY RISKS AND MITIGATION WE IDENTIFY AND MANAGE THE INHERENT AS WELL AS EXTERNAL RISKS TO OUR BUSINESS THROUGH OUR ROBUST RISK MANAGEMENT FRAMEWORK. WE BELIEVE IN GOING BEYOND COMPLIANCE TO ADOPT POLICIES, PRINCIPLES AND PRACTICES, WHICH WILL HELP MINIMISE OUR RISK EXPOSURE AND MAXIMISE OUR PERFORMANCE. KEY RISKS MITIGATION Market/Industry Market risk arises when a service provider is subjected to adverse market conditions such as increased competition, adverse demand conditions, economic condition or inability to develop markets or position service offerings to targeted customers. In all our operating markets, our competitiveness as a leading Asset Management & Infrastructure Solutions company is challenged by: • • The operational nature of our business (which tends to be deprioritised as a strategic business imperative by clients/ potential clients in a price sensitive industry). • • The global economic headwinds and Government factors, which may shrink public and private funds, affecting potential spending on infrastructure projects and asset management. • • Manual and labour-intensive aspects of asset management. Taking cognisant of the risk, we adopted a differentiated approach to drive growth, innovation and efficiency. Powered by smarter thinking, ingenious solutions and with technology as the key enabler, our objective is to revolutionise principles of asset management business. It is our long-term strategy to derive the benefits of technology, including mechanisation, automation and advanced analytics for improving operational efficiencies and delivering value to our clients. We continue to explore opportunities such as public & private healthcare support, infrastructure services and asset consultancy and management via deployment of technology solutions to set new benchmarks and communicate our value proposition to current and potential clients. Operations More than 80% of our employees are blue-collared workers and the working conditions - especially in healthcare support, property & facility solutions, infrastructure services and asset consultancy involving project construction sites, plants, hospitals, highways, high rise buildings – pose HSSE related risks if not properly managed. Our continuing challenge is to not only inculcate a ‘safety-first’ mindset but to continuously monitor our working environment to ensure full compliance with HSSE standards. We maintain a safe and healthy work environment to protect our people, supply chain partners and other stakeholders. To mitigate work-related HSSE risks: • • We have developed a HSSE Masterplan, with progressive targets and “Goal Zero” aspiration. • • We conduct HSSE certifications, training, mentoring and regular orientation to increase awareness, and instilling behaviour. • • We demonstrate strong leadership in our operations, continuous dialogue with supply chain partners to inspire greater accountability on safety at every level. To drive operational excellence, we constantly challenge status- quo process and drive innovation initiatives such as Continuous Improvement programme which includes the Innovation Garage and LEAN frameworks. Such initiatives have shown positive results in cost savings, improving process efficiency and inculcate a safer working environment. Compliance/ Regulatory Market/Industry Management Information System Financials People Operations Management Discussion & Analysis UEM Edgenta Berhad Annual Report 2018 About UEM Edgenta Chairman’s Statement 34