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Form 56-1 One Report 2022

Tools for managing operational risk
The Company uses the following tools for managing operational risks:
• Control self assessment (CSA): This is a technique that requires all work units to assess their internal risks

and controls regularly on a yearly basis, and to work out correction and monitoring plans.
• Key risk indicators (KRI): This is a technique that requires all business groups to monitor their business group

risks through the departments under their supervision. It is a primary approach to prevent such risks from
evolving into corporate risks in the future.
• Logging of loss data: All work units are responsible for keeping loss data arising from operational risks or

events that may cause operational risks. The data will help work units develop operational risk assessment
and management processes of their own in order to ensure they will have in place an appropriate internal
control system and prevent recurrence of such loss events in the future. This will also allow the Company
to maintain loss database for use to formulate guidelines for risk prevention and mitigation or for minimization
of impacts on its business operation.

3.) Financial risk

1. Liquidity risk refers to the risk that originates from the Company’s inability to pay its debts and obligations
on time, as it is unable to convert its assets into cash in order to pay the matured debts, or it is unable to acquire
adequate funds for such purpose, or it is able to acquire cash to pay its debts but at higher financial cost than the acceptable
level. Liquidity risk may affect the Company’s revenues and financial position.

Tools for managing liquidity risk
The Company has put in place policies/guidelines for managing liquidity risks and other relevant risks, and the
tools for monitoring and controlling liquidity risks with certain committees involved comprising the Assets and Liabilities
Management Committee and the Risk Oversight Committee, as follows:
• Estimating cash inflows and cash outflows in order to assess the Company’s liquidity status at different

intervals, i.e. every 1 month, 3 months, 6 months and 12 months in advance.
• Analyzing financial ratios, using:
- Financial ratios, e.g. debt-to-equity (D/E) ratio and operating cash flow to debt payment ratio.

- Projected current ratio in order to estimate the Company’s servicing capability of debts to be due every
3 months, 6 months, 9 months and 12 months in advance.
• Stress test of the Company’s financial liquidity.

Moreover, the Company has developed the contingency funding plan to cope with liquidity problem under
either normal or crisis situations to ensure access to sources of funds that will timely provide the Company with sufficient
amount of cash flows at appropriate financial cost in case of liquidity emergency.

The Company has specified liquidity risk indicators, namely estimation of cash inflows and outflows to

analyze liquidity gap, debt to equity ratio, and stress test. It has regularly monitored and reported its liquidity position
in order to provide information to the Assets and Liabilities Management Committee to enable it to manage short-term,
medium-term, and long-term liquidity appropriately. Such information will also serve as a tool that allows top executives