Annual Report 2020

RISK MITIGATION C. FINANCIAL 1. Pandemic COVID-19 The aviation industry has been the hardest hit due to the closure of geographical borders. This industry relies heavily on passenger volumes and due to travel restriction causing flight cancellations. Airline revenue generation is directly linked to traffic level. This significant drop in revenue has created operating cash flow challenges and operating losses which can lead to insolvency. 2. Fuel Price Fluctuations in fuel prices would have significant impact on the profitability. Fuel is a key cost component for the business operations. 3. Foreign Currency Translations Unexpected currency depreciation of the Malaysian Ringgit could have a significant impact on the cost of financing and business operations. This holds particularly of the forex exchange rates that is in the US Dollar. The Group mitigates this risk by cost reduction and cost avoidance exercises that manages the reduction of revenue. Further to that, the Group had sought after additional funding through several corporate exercises to keep the Group as a going concern. The Group mitigates this risk by actively monitoring and managing its exposure to fuel price volatility through various hedging strategies. The Group treasury department has a team that monitors and manages this hedging strategy. The Group mitigates this risk by actively monitoring and managing its exposure to foreign currency volatility through various hedging strategies. The Group treasury department has a team that monitors and manages this hedging strategy. D. COMPLIANCE 1. Non-Compliance to Regulatory Requirements Non-Compliance and breach of local laws, regulations, industry guidelines, and consumer authority requirements of multiple jurisdictions could lead to license and operational revocations. 2. Data Security and Privacy Violation of data privacy laws and regulations that could cause potential litigation and loss of customer confidence due to that data breach. 3. Anti-Bribery and Anti-Corruption Regulatory Requirements This had been an Act by the Malaysian Anti-Corruption Commission (MACC) that was enacted in 2008 and then amended in 2018. This amendment had incorporated Section 17A that puts all Management and the Board of Directors to be held accountable and responsible for any act of bribery and corruption with the organisation in any jurisdiction that it has business operations. The Group mitigates this risk by maintaining high level engagement with the regulators of each jurisdictions so that all regulatory requirements are adhered to constantly. Furthermore, the Group monitors all local regulatory landscape for new or amended regulations that affect the Group. The Group mitigates this risk by establishing a data governance framework with data security and privacy working group that reviews existing policies and procedures to ensure complete compliance with the required laws, regulations and best practices. The Group mitigates this risk by adopting and implementing a strict policy of “Zero Tolerance” on any act of bribery and corruption. This policy has been disseminated to all internal personnel and to all external parties that conduct business transactions with the Group. All internal personnel would need to acknowledge their awareness on this policy. 155 ANNUAL REPORT 2020