Maxis Berhad | Annual Report 2013

OVERVIEW OUR BUSINESS STRATEGIC REVIEW CORPORATE GOVERNANCE FINANCIAL STATEMENTS Maxis Berhad Annual Report 2013 OTHER INFORMATION 63 All identified risks are displayed on a 5 by 5 risk matrix based on their risk ranking to assist Management in prioritising their efforts and appropriately managing the different classes of risks. The Board and Management drive a pro-active risk management culture and regular risk awareness and coaching sessions are held to ensure that the Group’s employees have a good understanding and application of risk management principles. There is a dedicated ERM department which works closely with the Group’s operational managers to continuously strengthen the risk management initiatives within the Group so that it responds effectively to the constantly changing business environment and is thus able to protect and enhance shareholder value. CONTROL ENVIRONMENT AND STRUCTURE The Board and Management have established numerous processes for identifying, evaluating and managing the significant risks faced by the Group. These include periodic testing of the effectiveness and efficiency of the internal control procedures and updating the system of internal controls when there are changes to the business environment or regulatory guidelines. These processes have been in place for the financial year ended 31 December 2013 and up to the date of approval of this Statement on Risk Management and Internal Control for inclusion in the Annual Report. The key elements of the Group’s control environment include: 1. Organisation Structure The business of the Group is managed by the Board which provides direction and oversight to the Group and Management. To support the Board’s functions, the Board is supported by a number of established Board committees, namely the Audit, Nomination, Remuneration and Employee Share Option Scheme Committees, and ad hoc committees formed from time to time. Each Committee has clearly defined terms of reference and responsibilities, and activities of each Committee are reported back to the Board. Responsibility for implementing the Group’s strategies, operations and day-to-day businesses, including implementing the system of risk management and internal control, is delegated to the CEO and Management. The organisation structure sets out a clear segregation of roles and responsibilities, lines of accountability and limits of authority to ensure effective and independent stewardship. 2. Audit Committee The Audit Committee comprises only non-executive members of the Board, the majority of whom are Independent Directors. The current Audit Committee comprises members who bring with them a wealth of knowledge, expertise and experience from different industries and backgrounds. The Audit Committee reviews the Group’s financial reporting process, the system of internal controls and management of enterprise risk, the audit process and the Group’s process for monitoring compliance with laws and regulations and its own code of business conduct, as well as such other matters, which may be specifically delegated to the Committee by the Board, from time to time. Throughout the financial year, Audit Committee members are briefed on corporate governance practices, updates to Malaysian Financial Reporting Standards, as well as legal and regulatory requirements in addition to key matters affecting the financial statements of the Group. RISK RATING SCALE - 5 BY 5 MATRIX 1. UNLIKELY LIKELIHOOD OF OCCURENCE IMPACT 1. CRITICAL 2. MAJOR 3. MODERATE 4. MINOR 5. INSIGNIFICANT 2. LOW PROBABILITY 3. POSSIBLE 4. HIGH PROBABILITY 5. ALMOST CERTAIN HIGH MEDIUM LOW