RISK MANAGEMENT AND INTERNAL CONTROL STATEMENT INTRODUCTION The Board is pleased to present its Risk Management and Internal Control Statement (“Statement”) for FY2023 which has been prepared pursuant to paragraph 15.26(b) of the MMLR on an additional statement to state risk management and internal control of the Company, Principle B of the MCCG relating to risk management and internal control framework, and as guided by the Statement on Risk Management & Internal Control: Guidelines for Directors of Public Listed Issuers (“the Guidelines”). This Statement outlines the nature and state of the internal controls of the Group. BOARD’S RESPONSIBILITY The Board recognises its duty to uphold a robust framework risk management and internal control, continuously assessing its adequacy and effectiveness to safeguard shareholders’ interests and the Group’s assets. While Management is tasked with implementing a system of risk management and internal control, it is imperative to acknowledge the inherent limitations of such system. It is not intended to entirely eradicate all risks but rather to identify, evaluate, manage, and monitor risks to an acceptable level. This approach aims to mitigate the risk of material misstatements, losses, contingencies, fraud, or irregularities. It is important to emphasize that while this system can only provide reasonable assurance, it cannot guarantee absolute protection against risks that may hinder the Group’s attainment of corporate objectives. RISK MANAGEMENT FRAMEWORK The Board acknowledges that effective risk management is fundamental to the operation of the business. As such, respective Heads of Departments bear the responsibility for identifying, evaluating, managing, and mitigating both existing and potential risks pertaining to their functions and/or departments on a daily basis. To ensure ongoing oversight and management of risks, weekly management meetings are convened. These meetings serve as forums for monitoring and addressing the Group’s risks in a timely and comprehensive manner. During these sessions, key risks are identified, discussed, and appropriate control measures are communicated and implemented by the Senior Management team. The RMC, comprised entirely of independent directors, assumes responsibility for overseeing risk management matters relating to the Group’s activities. It ensures the implementation of prudent risk management practices across the Group’s operations and businesses. To assist the RMC in fulfilling its oversight duties, Heads of Departments from various functions are task with evaluating the Group’s risk management processes including the assessment of key strategic and operational risks. The Heads of Departments conduct regular risk management activities and prepares quarterly risk assessment reports. Concurrently, our in-house internal audit team conducts internal audits to identify significant risks within each department. Both Heads of Departments and the in-house internal audit team present their findings to the RMC during quarterly meetings for assessment, discussion, and action. The Chairman of the RMC highlights the key findings and oversees the entire risk management framework of the Group during scheduled meetings of the Board. Special meetings are convened when specific matters require immediate attention and discussion. During the financial year under review, the Heads of Departments had met with the RMC on four (4) occasions to present updates on their respective department’s quarterly risk assessment reports. These meetings facilitated indepth discussion on key risk areas impacting the Group, allowing for identification of recommended risk management strategies to effectively manage and mitigate the identified risks. The Group’s Risk Management Policy, established in October 2013, underwent review by the Board during their scheduled meeting held on 28 February 2024. Following thorough assessment, the Board determined that the Group’s Risk Management policy remained adequate and no further amendments were deemed necessary. The risk management practices outlined above represent an ongoing process aimed at identifying, evaluating, mitigating and managing significant risks that may impact the Group’s ability to achieve its corporate objectives. This process encompasses the financial year under review and extends up to the date of approval of this Risk Management and Internal Control Statement by the Board. 154 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K)
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