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Risk Management and Internal Control

RISK MANAGEMENT AND INTERNAL CONTROL

INFORMATION AND COMMUNICATION

Financial Reporting

A financial system is in place to ensure all financial transactions are timely and completely captured in the accounting system to generate an accurate periodic management financial reports for performance review and decision making by the Management and the Board.

Business Plan

Annual business plans are prepared by all business units (engineering and construction, property development and property investment and management), discussed in Management Committee meetings and presented to the Board for endorsement. The Board also reviews the operational and financial results on a quarterly basis.

MONITORING

Management Visit

The Executive Directors, Senior Management and Audit Committee members conduct visits to project sites (local and abroad) and meet up with the Group’s customers and business associates in order to review the Group’s operations, to gain first-hand knowledge of significant operational matters as well as to understand any significant risks so that an informed decision-making can be made.

Third Party Audit

Third party audits on Quality, Environment and Safety compliance at the Group’s construction sites are carried out, where required. These audit processes are conducted by the project owners and other relevant parties.

The Group Managing Director and Director of Finance & Accounts have provided the Board with the assurance that the Group’s risk management and internal control system has been operating adequately and effectively to mitigate any significant breakdown or weaknesses that may give rise to material losses incurred by the Group during the financial year under review or requires disclosure in the 2017 Annual Report. The monitoring, review and reporting systems are in place to give reasonable assurance that the controls put in place are adequate and appropriate to the Group’s operations and that risks are at an acceptable level. However, no systems can provide for absolute assurance that all risks can be adequately mitigated due to occurrence of unforeseeable circumstances, fraud or irregular acts.

Review of the Statement by External Auditors

Third party audits on Quality, Environment and Safety compliance at the Group’s construction sites are carried out, where required. These audit processes are conducted by the project owners and other relevant parties.

The external auditors have performed limited assurance procedures on this Statement pursuant to the scope set out in the Audit and Assurance Practice Guide (“AAPG”) 3 for Auditors on Engagements to report on the Statement included in the Annual Report issued by the Malaysian Institute of Accountants for inclusion in the Annual Report of the Group for the year ended 31 December 2017, and reported to the Board that nothing has come to their attention that causes them to believe the Statement intended to be included in the Annual Report is not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Guidelines, nor is the Statement factually inaccurate.

AAPG 3 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Directors and management thereon. The report from the external auditors was made solely for and directed solely to the Board of Directors in connection with their compliance with the Listing Requirements of Bursa Securities and for no other purposes or parties. The external auditors do not assume responsibility to any person other than the Board of Directors in respect of any aspect of this report.

CONCLUSION

The Board is satisfied with the adequacy and effectiveness of the Group’s risk management and internal control system. The Board has received assurance from the Group Managing Director and Director of Finance & Accounts that the Group’s risk management and internal control system is operating adequately and effectively.

(This Statement on Risk Management and Internal Control is made in accordance with the resolution of the Board dated 18 April 2018)