2019 UEM Edgenta Annual Report

123 UEM Edgenta Berhad UEM EDGENTA AT A GLANCE MESSAGE FROM OUR LEADERSHIP STRATEGIC FOCUS OPERATIONAL REVIEW SUSTAINABILITY EFFORTS CORPORATE GOVERNANCE INTRODUCTION FINANCIAL REVIEW ADDITIONAL INFORMATION Annual Report 2019 Statement on Risk Management and Internal Control 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 industry or value chain consequently altering the dynamics in the marketplace. c) 3 rd Order Effects: Effect of macroeconomic that affect the entire economy. Watch for Interdependent & Cascading Risk Drivers 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 E n v i r o n m e n t a l R e g u l a t o r y G e o p o l i t i c a l D e m o g r a p h i c s E c o n o m i c P a n d e m i c s T e c h n o l o g y F i n a n c i a l S t r a t e g y C u s t o m e r 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 D is 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