Kimlun Corporation Berhad Annual Report 2020

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL The main functions and duties of the RMC include, but are not limited to: (i) Provides oversight, direction and counsel to the Group risk management process which includes: t &WBMVBUJOH BOE JEFOUJGZJOH OFX SJTLT t 3FWJFXJOH BOE VQEBUJOH UIF 3JTL 3FHJTUFS BOE FOTVSJOH UIBU TJHOJGJDBOU SJTLT BSF CFJOH SFTQPOEFE UP BQQSPQSJBUFMZ BOE t .POJUPSJOH UIF (SPVQ T SJTL FYQPTVSFT BOE FOTVSJOH UIF JNQMFNFOUBUJPO PG NBOBHFNFOU BDUJPO QMBOT UP NJUJHBUF TJHOJGJDBOU risks identified; (ii) Evaluates the effectiveness of the risk management processes and support system to identify, assess, monitor and manage the Group’s key risks; (iii) Meets with senior management on a semi-annual basis to discuss and deliberate on the significant risks affecting the Group within the context of the business objectives and strategy; (iv) Establish Group risk management guidelines and policies and ensure implementation of the objectives outlined therein and compliance thereto; (v) Recommends for the Board’s approval, the Group risk management policies, strategies and risk tolerance levels, and any proposed changes thereto; and (vi) Reviews significant investment proposals A risk management report is tabled for review and acceptance by the AC and Board annually or at shorter intervals where necessary. The report identifies principal risks affecting or are likely to affect the Group, and the appropriate systems and/or actions to manage the risks. The key risks and some of the control measures taken to mitigate the risks for FY2020 are set out below: Risk area Control measures taken to mitigate the risks Business Continuity t 5IF (SPVQ JT FYQPTFE UP UIF SJTL PG JOBCJMJUZ to sustain operations, provide products and services, or recover operating costs as a result of the COVID-19 Pandemic t *NQMFNFOU UIF OFDFTTBSZ QSFDBVUJPOBSZ BOE TBGFUZ NFBTVSFT JO BDDPSEBODF XJUI guidelines from health authorities and government bodies. t 'SFRVFOU TFOJPS NBOBHFNFOU WJSUVBM PQFSBUJPOBM NFFUJOHT UP TUSBUFHJ[F JEFOUJGZ BOE solve operational issues. t $PNNVOJDBUF XJUI TVQQMJFST PO UIFJS TUPDLT SFBEJOFTT BOE QSPDVSF GPS BMUFSOBUJWF suppliers/supplies to improve supply chain lead times where necessary. t *NQMFNFOU DPTU DVUUJOH NFBTVSFT UP QSFTFSWF DBTI UP TVQQPSU XPSLJOH DBQJUBM requirements until the COVID-19 situation improves, such as suspending all non- essential operating and capital expenditure. t "QQMZ GPS FYUFOTJPO PG UJNF i&05w GPS DPNQMFUJPO PG PVS DPOTUSVDUJPO QSPKFDUT SFMZJOH on the force majeure clause in our contracts, as well as the provisions in the COVID-19 Bill 2020. t 8PSL DMPTFMZ XJUI DVTUPNFST GPS EFMJWFSZ PG PVS QSPEVDUT BIFBE PG TDIFEVMF XIFOFWFS the customer’s job site is able to accept delivery. t /FHPUJBUF XJUI CBOLFST PO UFSNT PG FYJTUJOH DSFEJU GBDJMJUJFT F H FYUFOTJPO PG QFSJPE PG financing of banker acceptance, and application for additional working capital credit facilities for contingency needs. Operational Risks t "T JO BOZ CVTJOFTT UIF (SPVQ JT TVCKFDU 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. t 0SHBOJTBUJPO TUSVDUVSF PVUMJOJOH UIF MJOFT PG SFTQPOTJCJMJUJFT BOE BVUIPSJUJFT GPS QMBOOJOH executing, controlling and monitoring the business operations. t 1FSJPEJD PQFSBUJPOBM SFWJFX NFFUJOHT BUUFOEFE CZ UIF &YFDVUJWF %JSFDUPST IFBET PG departments and key management staff to consider financial and operational risks and issues of the Group as well as any management proposal. t .POJUPSJOH PG BDUVBM QFSGPSNBODF BHBJOTU BOOVBM CVEHFU CZ UIF #PBSE t 3FMPDBUF MPZBM BOE FYQFSJFODFE FNQMPZFFT UP MFBE CSBODIFT PQFSBUJPOT t &OHBHFNFOU PG TQFDJBMJTU UP QSPWJEF DPOTVMUBODZ TFSWJDFT GPS UFDIOJDBMMZ DPNQMJDBUFE works. t 'PSNBMJTFE XIJTUMFCMPXJOH QPMJDZ DPEF PG DPOEVDU BOE XSJUUFO QPMJDJFT BOE QSPDFEVSFT on major processes to ensure compliance with internal control systems and relevant laws and regulations. t "QQPJOUNFOU PG TUBGG CBTFE PO UIF SFRVJSFE MFWFM PG RVBMJGJDBUJPO FYQFSJFODF BOE competency. Kimlun Corporation Berhad Registration No. 200901023978 (867077-X) 053