140 YINSON HOLDINGS BERHAD OUR CAPITALS FINANCIAL CAPITAL Cash flow & liquidity management Our robust free and available cash position provides us with a strong foundation for growth and expansion, as well as an adequate buffer to weather any unforeseen cash requirements. Our free and available cash is derived through cash flows from operations, raising of financial capital and drawdown of loans and borrowings pending deployment for projects. Yinson’s robust cash flow and liquidity management focuses on capital preservation and liquidity, ensures our cash are available to fund our business operation requirements based on cash flow predictions. Our strategy for managing liquidity includes: • Maintaining an appropriate mix of high-quality liquid investments and adequate cash buffers to meet unexpected cash outflows. • Maintaining 5-year cash flow projections to match the allocation of long-term financial capital with project capital expenditure needs. • Using reasonable assumptions on continuing operations and financing of projects secured, Yinson’s liquidity is sufficient for at least the next 5 years. • Conducting regular stress testing to assess cash flow vulnerability under distressing situations and deploying the necessary action plans. Cash flows and liquidity, pg 66 Managing financial risks Yinson implements and maintains an effective system of risk management and internal control, with instruments, organisational structures and procedures designed to maintain the balance between risk and reward, relative to potential opportunities. An integral part of the risk management and internal control system is the Enterprise Risk Management (“ERM”) model which Yinson has adopted and developed over time. The model aims to manage the main risk that may impact strategic and management objectives, ensuring greater consistency of methodologies and tools to support risk management. Additionally, Yinson’s Corporate Treasury Policy sets out the parameters for the management of Yinson’s free cash, with the objective of capital preservation and liquidity. Establishing good corporate compliance structures & processes, pg 76; Statement on Risk Management & Internal Control, pg 202
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