APC Group, Inc. recognizes that effective risk management is fundamental to achieving its strategic objectives and protecting shareholder value. As an investment holding company with interests in energy-related projects, mining, and cement ventures, the Company is exposed to a variety of business, financial, operational, environmental, and regulatory risks. Accordingly, the Company has adopted a Risk Management Framework that promotes a culture of risk awareness, accountability, and sound decision-making throughout the organization.

The Company’s risk management processes are designed to identify, assess, monitor, and manage risks that may affect the achievement of its business objectives, the protection of its assets, compliance with applicable laws and regulations, and the preservation of its reputation. The Company aligns its risk appetite with its long-term strategic goals and investment objectives.

Risk Governance

The Board of Directors exercises overall oversight of the Company’s risk management system through the Risk Oversight Committee (ROC). The ROC assists the Board in ensuring that an effective risk management framework is established and maintained across the organization.

The ROC is responsible for:

• Reviewing the adequacy and effectiveness of the Company’s policies and procedures relating to the identification, assessment, management, monitoring, and reporting of risks;

• Ensuring that Management appropriately identifies and mitigates significant financial and non-financial risks;

• Monitoring emerging risks that may affect the Company’s investments and operations; and

• Reporting to the Board on the effectiveness of the Company’s risk management practices.

The ROC conducts periodic reviews of the Company’s risk management framework and reports its findings and recommendations to the Board of Directors.

Key Risks and Mitigation Measures

Economic and Market Risks

The Company’s investments and operations may be affected by changes in domestic and global economic conditions, inflation, interest rates, foreign exchange fluctuations, commodity prices, and overall market sentiment. Economic downturns may adversely affect demand for energy resources, cement products, and mining outputs, thereby impacting revenues and profitability.

To mitigate these risks, the Company continuously monitors market conditions and adopts prudent financial and investment management practices.

Commodity Price Risks

The performance of the Company’s investments in the energy, mining, and cement sectors may be significantly influenced by fluctuations in commodity prices, including fuel, minerals, cement-related raw materials, and other key inputs. Changes in commodity prices may affect operating margins and project viability.

Management regularly evaluates market trends and maintains appropriate risk management strategies to address commodity price volatility.

Regulatory and Environmental Risks

The Company’s investments are subject to various laws, regulations, permits, and government policies governing mining, energy development, environmental protection, health and safety, and land use. Changes in regulatory requirements or delays in obtaining permits and approvals may affect project timelines, costs, and operations.

The Company seeks to maintain compliance with applicable regulations and works closely with regulatory agencies and stakeholders to address legal and environmental requirements.

Operational Risks

The Company’s investments may be exposed to operational risks arising from equipment failures, project delays, supply chain disruptions, labor shortages, natural disasters, and other unforeseen events that could adversely affect business operations.

To mitigate these risks, the Company and its investee entities implement operational controls, preventive maintenance programs, business continuity measures, and project monitoring systems.

Health, Safety, and Environmental Risks

Energy, mining, and cement operations involve inherent health, safety, and environmental risks. Workplace incidents, environmental accidents, or non-compliance with environmental standards may result in operational disruptions, regulatory penalties, or reputational damage.

The Company promotes adherence to established health, safety, and environmental standards and encourages continuous improvement in risk prevention and management practices.

Financial Risks

The Company is exposed to financial risks, including liquidity risk, credit risk, interest rate risk, and funding risk. The availability and cost of capital may affect the Company’s ability to finance investments, acquisitions, and expansion projects.

The Company maintains prudent financial controls, regularly monitors funding requirements, and evaluates financing alternatives to support its strategic objectives.

Information Technology and Cybersecurity Risks

The Company relies on information technology systems to support business operations and decision-making. Cybersecurity threats, system failures, unauthorized access, and data breaches may disrupt operations and compromise sensitive information.

To address these risks, the Company implements appropriate information security measures, cybersecurity controls, data protection policies, and disaster recovery procedures.

Data Privacy Risks

The Company collects and processes information relating to employees, investors, business partners, suppliers, and other stakeholders. Unauthorized access, disclosure, or misuse of such information may expose the Company to legal, financial, and reputational risks.

The Company complies with applicable data privacy laws and regulations and maintains policies and procedures designed to safeguard personal and confidential information.

Commitment to Risk Management

APC Group, Inc. remains committed to strengthening its risk management practices and fostering a culture of accountability and risk awareness throughout the organization. Through effective governance, sound internal controls, and proactive risk management, the Company seeks to support sustainable growth and create long-term value for its stakeholders.