and potential risk events. These KRIs are developed in consideration of the risk appetite of the BRC/BSRC and Management. The status of KRIs is reported quarterly to the BRC/BSRC, GRMWC and SRMWC with mitigating measures extensively deliberated to address risk exposures from escalating beyond tolerable levels. The BRC/BSRC monitors KRIs impacting five (5) key areas, which are operations, financial standing, regulatory, reputation and international investment. Operational-level KRIs are deliberated by the GRMWC and SRMWC that are platforms for inter-business collaboration to mitigate risks from a group-wide perspective. Annually, these KRIs undergo review to ensure relevance and adequacy, aligning with short- and long-term business objectives while considering changes in internal and external environments. Communication & Integration TNB business entities consistently engage in communication with both internal and external stakeholders, providingcurrent and comprehensive risk information. Timely feedback is gathered and integrated to foster continual enhancement. Integral to their role is the seamless integration of risk management within their objectives, governance, leadership commitment, operations, and performance management. This holistic approach ensures that risk management becomes an inherent part of the operational fabric, enhancing the overall resilience and adaptability of the Group. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Category No. TNB Strategic Risk Finance 8. Ineffective capital allocation to maximise value creation Management makes decisions on how to source and allocate funds effectively to maximise potential return. Failure to do so would have dire implications to TNB, including missed opportunities, reduced financial profits and market confidence. Capabilities 9. Gaps in workforce capabilities to deliver RT strategy and sustainability aspiration It is critical for TNB to focus on developing and deploying new institutional capabilities to the right areas. We also need to enhance