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Key Risks

ST Engineering is committed to enhancing our risk management processes and fostering a risk-aware culture across the Group. This proactive approach aligns with our dedication to sustainable, responsible business practices, reinforcing resilience and long-term value creation for our stakeholders. Through our Enterprise Risk Management framework, we identify, assess, monitor, and manage key risks over the short, medium, and long term. Key risks are regularly reviewed and updated under this framework.

Cyber breaches present significant risks resulting in severe financial impact and reputational damage. Therefore, sustained efforts enable us to maintain effective defences and regulatory compliance.

We have a robust regime to increase employee awareness and fortify our cyber defences, including annual e-learning courses and phishing email campaigns. Regular reviews, audits, and continuous monitoring are conducted to ensure compliance and identify weaknesses. Our IT Disaster Recovery Plans ensure recovery of information systems and assets, and we carry out periodic exercises to ascertain their relevance.

Our growth depends on attracting and retaining global talent. Our People development strategy enhances our capacity for growth, builds an engaged workforce, and positions us at the forefront of people practices. This is achieved through career development, diversity, equity and inclusion, reward systems, work-life integration, and harmonious union relations.

Workplace Safety & Health
We are committed to “Safety Before Profits” and strive to achieve zero accidents. We foster a culture of well-being and productivity through our robust safety protocols, leading to enhanced efficiency and higher employee morale. Control measures are integrated into key business processes, with proactive reporting and comprehensive hazard identification and risk assessment. We have programmes to raise awareness, recognise individuals and teams, and promote participation for a total safety culture. We continuously seek improvements and innovative solutions to enhance workplace safety and health for all stakeholders.

Physical/Information Security
We face the constant threat of security breaches that could expose us and our customers to a multitude of risks. We mitigate these risks by implementing structured security protocols and conducting regular audits to check for compliance with national security manuals.

We comply with applicable laws and regulations in the jurisdictions we operate in. Our regulatory compliance framework proactively identifies obligations and sanctions and embeds compliance into day-to-day business processes. Violations and appropriate remediation measures are reviewed by management and the Risk and Sustainability Committee in accordance with our policy. We have implemented quality and safety management systems to ensure strict compliance with laws and regulations.

We have zero tolerance for fraud and corruption and have a framework for combating it. Our Code of Business Conduct & Ethics enshrines our commitment to good governance, ethics, and integrity. Annual training on the Code is compulsory for all employees. Contracts with intermediaries include anti-corruption undertakings and representations as well as acknowledgment of our Anti-Corruption Policy.

Disruptive events can have dire consequences if not appropriately managed.

To ensure continuity of critical business operations in event of any disruption, a robust Business Continuity Management (BCM) programme covering all critical operations and facilities, as well as operations and facilities of key suppliers or service providers, is in place. We strengthen our supply chain resilience by leveraging on the Group’s network and relationships with key suppliers, planning our production proactively, and monitoring and analysing of supply chain events closely to plan ahead for our purchasing needs and optimise sourcing efforts. We also recognise the need to diversify suppliers and conduct scenario analysis to enhance BCM readiness.

We seek insurance coverage which recovers certain quantifiable losses. Periodic tests on our business continuity plans are carried out and the key findings are reported to management.

Interest Rate
Higher USD and SGD interest rates will increase cost of borrowing and impact our operating results and profitability.

To manage interest rate risks, we hedge our interest rate exposure in accordance with the Group policy to reduce the volatility and impact of interest rate movements on our net profit.

Non-payment by the Group’s customers and other counterparties will impact our net profit. Our Credit Control Policy governs how credit risk in the Group is managed. It comprises a framework of credit evaluation, credit limit and period.

We prioritise excellence in product and service quality, safety, and reliability. This is done with a holistic approach to quality and safety involving all stakeholders and implementing robust safety management systems at every stage, from design and development to production and customer service.

We are committed to effective project management for successful delivery, upholding quality and meeting contractual obligations. We have a rigorous project review and quality assurance system, led by qualified project directors and managers. The Major Bid Review Committee reviews the project bid management process, identifying risks and addressing them early to achieve business objectives. This strengthens our project bidding and management process, enhancing project outcomes and delivering value to our customers and stakeholders.

Innovation risk is managed collectively by business leaders and supported by engineering and technology experts across ST Engineering.

We conduct R&D activities and build technology and engineering capabilities so that they can be applied to solve real-world challenges. We drive innovation culture across the organisation through continuous improvements, product development and disruptive technology. We conduct technology scanning and establish external partnerships with researchers via Research Translation @ ST Engineering, and work with startups via venture investments.

We have a vision and clear roadmap to achieve long-term sustainable growth with built-in flexibility into the strategy to swiftly adapt to changing circumstances in today's dynamic business environment.

We remain committed to making measured and sound decisions to achieve our strategic long-term objectives, reinforced by a willingness to take calculated and calibrated risks. The progress of our strategic initiatives is monitored regularly and risks are reassessed periodically.

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