2020 UEM Edgenta Annual Report

f. Monitor, review and report risks: Risk events and trends to be continually scanned, assessed and monitored and similarly risk responses are monitored continuously to ensure that risk responses are operating as designed and expected. g. Communicate: Communication is required for an effective risk management programme. Changing business conditions continuously alters the risk profile of an entity, hence, frequent and explicit conversations about risk is vital to maintain continued awareness and management of key risks. Risk Identification Process Risks are those internal or external factors which could affect/influence the achievement of business objectives either positively or negatively. • Risk waterfall is used to systematically identify the 1 st , 2 nd and 3 rd order effects of each risk event; link some of the events into cascades: a. 1 st Order Effects: Effects that have a direct impact on financial performance. b. 2 nd Order Effects: Effects that have an indirect impact on financial performance; they influence another element in the industry or value chain consequently altering the dynamics in the marketplace. c. 3 rd Order Effects: Effect of macroeconomic that affects the entire economy. WATCH FOR INDEPENDENT & CASCADING RISK DRIVERS C U S T O M E R D I S T R I B U T I O N C O M P E T I T O R S ’ R E S P O N S E C A P I T A L / F U N D I N G M A R K E T S U P P L Y C H A I N COMPANY Healthcare Support, Property & Facility Solutions, Infrastructure Services and Asset Consultancy  Market/Industry  Operations  Financials  Compliance  People  Management Information System P U B L I C P O L I C Y F I N A N C I A L G E O P O L I T I C A L T E C H N O L O G Y R E G U L A T O R Y P A N D E M I C S E N V I R O N M E N T A L S T R A T E G Y D E M O G R A P H I C E C O N O M I C UEM EDGENTA BERHAD 142 Governance STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL