MSM Malaysia Holdings Berhad Annual Report 2019

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL This Statement is made pursuant to Rule 15.26(b) of Bursa Malaysia Securities Berhad Main Market Listing Requirements, Malaysian Code on Corporate Governance 2017 and in accordance with the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers. RESPONSIBILITY AND ACCOUNTABILITY The Board is committed to maintain and continuously improve the Group’s system of risk management and internal control. The Board acknowledges the importance of a sound risk management system and internal control practices for good corporate governance with the objective of safeguarding the shareholders’ interest and the Group’s assets. In view of the limitations that are inherent in any system of internal control, this system is designed to manage, rather than eliminate the risks that hinder the Group from achieving its objectives. Hence, it can only provide reasonable, but not absolute assurance against material misstatements or losses or the occurrence of unforeseeable circumstances. There are two committees at Board level that support the Board in its risk management and internal control responsibilities: i. Board Governance and Risk Management Committee (BGRMC) which is tasked with overseeing risk management and governance aspects of the Group; and ii. Audit Committee (AC) which is tasked with assessing the risks and control environment and overseeing financial reporting, including the external and internal audit. The Board of Directors (the Board) of MSM Malaysia Holdings Berhad (MSM Group or the Company) is pleased to present its Statement on Risk Management and Internal Control (Statement) which outlines the nature and scope of risk management and internal control of the Group for the financial year ended 31 December 2019. RISK MANAGEMENT The Risk Management function is responsible for implementing the enterprise riskmanagement process, while themanagement team is required to assume responsibility for risk management within their functional areas and ensure that risk management is embedded in their day-to-day business processes. The Management’s key role is to identify significant risks, evaluate the risk profile and drive risk mitigation strategies on a regular basis. MSM Group has a dedicated Corporate Governance and Risk Management Department (CGRM) which undertakes the following responsibilities: • Reviewing, assessing, enhancing and monitoring the Group’s Risk Management Framework including risk management policies and procedures; and in alignment with FGV Group Risk Management framework; • Providing guidance to all MSM Group’s operations in identifying and assessing risks, developing relevant and effective mitigation strategies to manage risks; • Maintaining the Risk Register for the MSM Group; • Preparing risk reports to the Board Governance and Risk Management Committee (BGRMC) and Board; and • Overseeing MSM Group’s Business Continuity Management. MSM Malaysia Holdings Berhad | Annual Report 2019 98