MSM Malaysia Holdings Berhad Annual Report 2019

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Competency MSM views its employees as invaluable assets. The Group is committed to its employees and professional development at all levels. In achieving the next level of productivity, excellent service, and performance, MSM has developed SWIIT Values ( S for Sense of belonging, W for winning attitude, I for Integrity, I for Innovation and T for Teamwork) which bring meaningful purpose, practical strategies and goals together to make the organisation aspirations more credible and achievable. The Group has also developed several programmes, in sync with its continual improvement culture, to ensure adequate supply of skilled and knowledgeable workforce who are then groomed to take on leadership positions. This is a key focus towards strong, sustainable and balanced growth. The programmes are holistic in nature, aiming to enhance both professional and behavioural competencies by incorporating elements such as integrity, governance as well as the Group’s core values. Authority and Responsibility Organisation Structure The Group has a comprehensive organisational structure which organises its business operations. The organisational structure provides clear lines of reporting, authority and segregation of duties, which promotes ownership, accountability, and delegated authority. Authority Limit • Group Discretionary Authority Limit (DAL) Consistent with the spirit to continually enhance its internal control, MSM Group’s DAL was regularly reviewed and updated to promote organisational efficiency. The Board approved the revised DAL version 5.0 on 24 August 2018. • Legal Authority Limit (LAL) The LAL is aligned with FGVH Group Legal’s practice of having its own policies and procedures, being the custodian of all legal matters relating to agreements, litigation matters, appointment of legal firms and signing of legal documents. The Board has approved the revised Legal Authority Limit (LAL) version 2.0 on 21 August 2019. Job Description Each role in the organisation structure is supported by clear description of job responsibilities which are linked to the vision and goals of the Group. A well developed and effective job description has been designed for clarity of responsibilities and relationship between functions which will enhance collaboration across the Group moving towards operational efficiency besides supporting the succession planning. It can retain and motivate the best talents by ensuring that employee’s engagement and helps drive high performance culture. REVIEW OF STATEMENT BY EXTERNAL AUDITORS The External Auditors have reviewed this Statement of Risk Management and Internal Control as per Paragraph 15.23 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements. Their limited assurance review was performed in accordance with Audit and Assurance Practice Guideline (APPG) 3 issues issued by Malaysian Institute of Accountants. AAPG3 does not require external auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group. STATEMENT BYTHE BOARD Based on the processes and measures undertaken by the Board and its Committees during the financial year and assurance provided by the Group Chief Executive Officer and Chief Financial Officer, the Board is of the view that the risk management framework and internal control system as described in this statement is sound and effective to safeguard the shareholders’ investment and MSM Group’s assets. This Statement is made in accordance to the resolution of the Board dated 17 April 2020. MSM Malaysia Holdings Berhad | Annual Report 2019 102

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