2020 UEM Edgenta Annual Report

Risk Management Approach • The Group adopts a formal and structured approach for the risk assessment process. • The methodology comprises sequential steps of risk management activities that are interrelated and iterative. The process applied to the whole of a business (enterprise level) or to any part of a business (divisions, departments, functions, business units, projects, processes). a. Set/clarify business objectives: Understanding of what the objectives are for the Company and its group of companies. b. Establish context: Establish the context and boundaries within which the Group operates. c. Identify risks: Risk(s) are those internal or external factors which could affect/influence the achievement of business objectives either positively or negatively. d. Assess risks: Prioritise risks by evaluating the potential impact on business objectives if a risk were to materialise together with the likelihood of occurrence. The Group adopts the following risk rating matrix to articulate the relationship between risk impact and likelihood. RISK RATING Likelihood Risk Impact Insignificant Minor Moderate Major Catastrophic Certain Medium Significant Significant High High Likely Medium Medium Significant Significant High Possible Low Medium Medium Significant High Unlikely Low Medium Medium Significant Significant Remote Low Low Medium Medium Significant e. Respond to risks: T he Group adopts the 4Ts (Take, Treat, Transfer & Terminate) strategy in responding to the identified risks and qualify these according to the acceptable levels. TAKE Intentionally taking risk due to inherent/ unavoidable risk or to pursue/sustain higher returns, with informed approval by appropriate level TRANSFER Transfer the risk by moving the risk to third party but accountability still resides with Risk Owners TREAT Mitigation plans established to reduce the likelihood & impact TERMINATE Avoidance by not to proceed or continue with a particular activity or seeking alternative means to achieve objective 1 2 3 4 5 6 7 8 9 ANNUAL REPORT 2020 141