MSM Malaysia Holdings Berhad Annual Report 2020

Ethics and Integrity MSM is committed in applying the highest standards of ethical conduct and integrity in conducting its business activities by putting in place adequate Policies & Procedures as the fundamentals for internal control. It is also aligned with the Guidelines on Adequate Procedures for Corporate Liability, which are based on the five guiding principles of T.R.U.S.T. In tightening up the Group’s internal control, MSM has developed/enhanced through the following: Integrity Initiatives Training and Awareness programmes were held for MSM Employees covered the following: • Understanding on Corporate Liability (MACC Amendment Act Section 17A) • Understanding Guidelines on Adequate Procedures • Whistleblowing • ISO 37001 Anti-Bribery Management System The objective is to ensure that MSM Employees has an in-depth knowledge and understanding of the latest and current law and its impact on MSM Group. Internal Control Elements Competency Policies & Procedures Authority & Responsibility Ethics & Integrity Monitoring Risk Environment & Moving Forward Challenges Moving Forward COVID-19 Pandemic Monitor closely the positive case and keep on improving the COVID-19 Response Plan and strictly follow the Government Restrictive Orders. High dependency on imported raw materials Monitor constantly global prices for raw materials and obtain industry feedback for a favourable pricing on back-to-back basis for domestic sales or forward buying. Foreign exchange fluctuations on MYR against USD Actively monitor the foreign exchange market to capture the downward trend of MYR/USD, hence gradually averaging down the cost of buying USD to ease in the Group’s hedging strategies. Cyber threat on company IT infrastructure Ensuring business continuity plan is in place to reduce downtime due to cyber-attack. Excess supply of refined sugar in the local market Continuously improve marketing plan and strategy to penetrate export markets. Operational and service reliability due to machinery failure in the refineries Establish consistent maintenance and servicing schedule for refining machinery. INTERNAL CONTROL The Group manages its risks by implementing various internal control mechanisms. The mechanisms apply to all subsidiaries within the Group. The key elements of our internal control structure are as follows: MSM MALAYSIA HOLDINGS BERHAD Annual Repor t 2020 117 SUSTAINABILITY REPORT EFFECTIVE LEADERSHIP CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION DETAILS OF THE ANNUAL GENERAL MEETING