2018 UEM Edgenta Annual Report

KEY RISKS MITIGATION Financials We are exposed to financial risks such as credit and foreign exchange fluctuation, which arises primarily from trade and other receivables. Credit risk refers to the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligation. Foreign exchange risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuate due to changes in foreign exchange rates against Malaysian Ringgit. The main foreign currencies in which the transactions are denominated are Singapore Dollar, UAE Dirham, New Taiwan Dollar, Indonesian Rupiah, Indian Rupee due to our operations in Singapore, Dubai, Taiwan, Indonesia and India. We control credit risk by carrying out stringent credit evaluations and monitoring procedures on customers and receivables respectively. In mitigating foreign exchange risk, we maintain a natural hedge to the extent possible, by borrowing in the same currency as the future revenue stream to be generated from the overseas entities. Compliance/Regulatory We take cognisant that the Company’s sizeable business are concession in nature, operating in various industries, especially healthcare support and infrastructure services that are subject to a broad range of rules and regulations. Any adverse changes in government policies or non-compliance could lead to reputational or financial damages and disruption in operations. With our cross-industry experience, we are well-positioned to meet the strategic needs of our clients and value-add, even in concession businesses. We make a concerted effort to deliver quality services to our clients with strict adherence to service level performance. We have dedicated functions such as Compliance, HSSE, Quality Assurance/Quality Control, and Secretarial to monitor regulatory and policy developments, liaise with relevant governing authorities to stay abreast of regulatory changes and our obligations. People People are one of our great assets and key pillars of success. Strategies are mere statements without their skilful execution. Our challenges are to upskill and reskill our people, acquire the right talent in a competitive market and retain our best people, who are able and motivated to deliver value for our stakeholders. To build a workforce of the future, the Edgenta Academy is well positioned to upskill and reskill our people, equip them with new talents and knowledge. We not only hire the ‘right’ talent, but also retain the ‘best’ talent by continuously benchmarking with competitive industry practices. Our performance management system aims to align the interests and aspirations of our workforce with organisational growth objectives. Our progressive remuneration systemmotivates and rewards greater performance outcomes year on year. Management Information System Organisation-wide, we see technology as a key enabler and the biggest game changer, which will allow us to optimise resources, reduce costs, increase productivity and improve our offerings for better customer outcomes. Due to the growing interconnectedness of our systems, there is an increased risk of exposure to cyber threats, breach of information security, compromised data integrity/privacy and prolonged disruption of IT ecosystem. To remain relevant and maintain a competitive advantage in an era of increasing digitisation, we are embarking on a digital revolution by adopting Enterprise Resource Planning (“ERP”) system. We look at company-wide security planning through monitoring of critical information, security control via comprehensive IT security solutions and continuous awareness programmes. We undertake self-assessment in identifying gaps and seek ways to improve our digital assets and user experience. Financial Review Stakeholder Information AGM Information 35 Governance Review of Sustainability Activities