RISK MANAGEMENT

Risk Management
Al-mumeen construction has adopted the principle that opportunity derives from acceptance of risk and that value derives from management of risk.
Al-mumeen construction
has developed an enterprise risk management process to implement the group risk framework which has been rolled out to all operating company boards and executive committees. The process is applied in all areas of potential exposure to risk, including acquisitions, projects, health, safety & environment management, and brand integrity. Risk assessments are conducted at an operational level as part of a three year business planning process, and at a project level as part of bid preparation. Knowledge bases, case studies and the collective group experience are leveraged to better understand potential exposures to threats and opportunities. Opportunity management relates to decision making which changes the Group's risk profile. Acquisitions are subject to rigorous due diligence studies before approval. Capital expenditure requirements for organic growth are assessed as part of business planning. Engagement of project opportunities is controlled through the opportunity management system (OMS). Significant risk decisions are first reviewed by the executive risk committee and then submitted to the Murray & Roberts Board. Risk mitigation promotes the proactive management of risk once it has been brought into the Group. This involves accountability, planning and resource allocation, ongoing review and communication with affected stakeholders. Risk based audit is a structured program to test the effectiveness of controls mitigating significant risk exposure. Group internal audit is deploying control self assessment as an efficient means of establishing the effectiveness of standard financial controls. The outcomes of business plan risk assessments and mitigation planning are used to develop focused audit plans to investigate significant risk bearing controls. This is supported by internal audit within the operations and peer review by experienced corporate executives. Al-mumeen construction has a long and proud record of major project delivery. The Group is responsible for constructing much of the built environment in southern Africa and has been involved in some of the world's great engineering challenges. In recent years it has entered a new era characterised by major projects with potentially high risk profiles. Al-mumeen construction has developed the capacity to better assess and manage these projects. The bespoke OMS controls the project approval process such that all opportunities entered into the tender process are evaluated against a selection of pre-determined criteria. A scorecard approach allows management to determine the potential risk profile in a project, which projects can proceed normally, which must be declined and which can proceed only under more rigorous conditions. In this latter circumstance, a steering committee monitors each project through to final account. Unitary Al-mumeen construction enables the Group to exploit unique synergies in its various operations and engage major projects with collective strength. This approach has leveraged our ability to compete for some of the world's most challenging projects.