risk management Matrix’s approach to identifying and prioritising risks is based on the best practice ISO 31000 Risk Management framework. Matrix uses this approach for the identification and classification (prioritisation) of FBO risks and progressively intends to extend the approach towards identification and prioritisation of SRROs and CRROs. The risk idenঞficaঞon process commenced in Matrix through the undertaking of a comprehensive materiality assessment exercise, where a selecঞon of ESG topics were assessed for their materiality to Matrix’s business model and value creaঞon aspiraঞons. The criteria used for assessment was the extent of materiality of each topic from both financial and impact materiality perspecঞves. Going forward, this process has been further strengthened in FY2025 with a SRRO and CRRO idenঞficaঞon and validaঞon process involving Senior Management from the Group’s business divisions. This has provided increased clarity on Matrix’s most material topics. The Group intends to further develop its insights and visibility through addiঞonal management discussions, development of a ESG Risk Register or to integrate the SRROs and CRROs into the exisঞng corporate risk register and to strengthen the financial quanঞficaঞon aspects. RISKS AND MITIGATION MEASURES The risks are future oriented and comprise both financial and ESG related risks. The Group’s strategic prioriঞes and its future orientaঞon include consideraঞon for miঞgaঞng and managing these risks. Risks cannot be totally eliminated but can be effecঞvely managed to reduce Group exposure and potenঞal/actual impact. PROCESS OF DETERMINING RISKS • Risk topics idenঞfied through risk workshops, stakeholder discussions, incident reviews, inputs from Board committees and benchmarking industry peers. • Data sources: Operaঞonal data, regulatory updates, market trends, and external events, industry players’ annual reports, etc. • Likelihood Assessment: Based on historical frequency, predicঞve modelling, and views of internal risks owners and management. • Severity Assessment: Assessed based on potenঞal/actual extent of financial, operaঞonal, HSSE, and reputaঞonal impacts. • Risks are ploed on a severity and likelihood matrix to enable ascertainment of risks. Criঞcal risks are escalated to management for immediate acঞon. • Detailed miঞgaঞon measures are developed for high and criঞcal risks, focusing on eliminaঞon, reducঞon, or transfer of risk. • Risks are monitored conঞnuously, with periodic reviews to ensure relevance and effecঞveness of controls. • Changes in external or internal factors are incorporated into updated risk evaluaঞons. RISK MANAGEMENT Risk Identification Risk Assessment Risk Matrix Development Risk Mitigation Constant Review HSSE: Health, Safety, Security and Environment 84 MATRIX CONCEPTS HOLDINGS BERHAD INTEGRATED ANNUAL REPORT 2025 05 VALUE CREATION STRATEGIC REVIEW
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