INTRODUCTION In accordance with the practice set out in the Malaysian Code on Corporate Governance 2021 a listed company should establish an effective risk management and internal control framework. The Board of Directors (“Board”) is pleased to provide this Statement on Risk Management and Internal Control pursuant to Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and as guided by The Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers. The statement outlines the key features of the risk management system and internal control of the Group during the year under review. The Board delegates some of the above responsibilities to sub-Board committees namely the Audit Committee, the Risk, Governance and Sustainability Committee, the Nomination and Remuneration Committee, the Board Procurement and Tender Committee, the Whistleblowing Committee as well as the Employee Share Option Scheme Committee. The Board receives reports periodically from the sub-Board committees to keep the Board informed of the sub-Board committees’ work, key deliberation and decisions on delegated matters. The responsibilities and functions of the Board and each of sub-Board committees are specified in the Board Charter and the Terms of Reference for the respective sub-Board committees. The Board taking into consideration the reasonable assurance from the Risk, Governance and Sustainability Committee and the Management, is of the view that the risk management and internal controls systems of the Group is satisfactory and adequate in safeguarding the shareholders’ interests and assets of the Group. Notwithstanding this, the Group will continue to take measures to ensure that there is an effective ongoing review of the entire control, compliance and enterprise risk management framework. However, in view of the inherent limitations, the Board recognises that any system of risk management and internal control is designed to identify and control rather than eliminate risks and can only provide reasonable assurance that the significant risks impacting the Group’s strategies and objectives are managed within the risk appetite, rather than completely eliminate the risks of failure. RISK MANAGEMENT Risk management is embedded by the Board as part of the business operation activities of the Group. The Group’s systems and controls are designed to ensure that any exposure to significant risk is understood and appropriately managed and that the Group continuously takes measures to strengthen the risk management and internal controls system. RESPONSIBILITY OF THE BOARD The Board acknowledges its principal responsibility for the Group’s risk management and internal control systems and practices to safeguard shareholders’ investments and the Group’s assets. To ensure the integrity, appropriateness and effectiveness of the Group’s risk management and internal controls, the Board is constantly and actively identifying the Group’s level of risk tolerance, and assessing and monitoring the key strategic and business risks. The Board upholds its pivotal role and control over the strategic planning, financial, technology, regulatory and compliance functions by constantly keeping abreast with the ongoing developments and best practices in terms of risk and governance amidst the current dynamic and challenging business environment. The Board actively participates in the setting of the Group’s objectives and strategies and ensures the effective discharge of the Board’s functions in risk management and internal controls on the following principal responsibilities: setting the overall tone of policy and framework for risk management, including the risk appetite and its tolerance levels; identifying principal risks and ensuring the implementation of appropriate controls and systems to monitor and manage these risks; seeking assurance on the proper functioning of risk management and the internal control system through risk management reports. approving the Enterprise Risk Management Framework and evaluating the effectiveness of the framework implementation; and DAGANG NeXCHANGE BERHAD 138 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
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