Our Governance DAGANG NeXCHANGE BERHAD 174 SEGMENT KEY INTERNAL CONTROL ELEMENTS Remuneration Policy for Directors and Senior Management The establishment of the policy on 8 October 2021 is designed to support DNeX Group’s key strategies and create a strong performance-oriented environment and be able to attract, motivate and retain talent as well as promoting business stability and growth of DNeX Group. Strategic Plans and Performance Management DNeX Group undertakes a comprehensive annual budgeting and forecasting exercise on all business and operating units to ensure that strategic initiatives are developed in line with DNeX Group’s moving forward business objectives. Each operating unit is accountable to prepare a comprehensive analysis of strategic priorities and undergoes a detailed budgeting and brainstorming process prior to the finalisation of the five (5) year strategic plan and the detailed annual operating plan for the forthcoming financial year. The Board constructively challenges and contributes to the development of DNeX Group’s strategic directions at Group and key subsidiary levels. The Board probes the Management to ensure that the Management has taken into consideration the varying opportunities and risks whilst developing robust strategic plan. DNeX Group’s strategic plan and annual operating plan is reviewed, deliberated and approved by the Board accordingly. DNeX Group’s approved strategic business directions in terms of financial and major initiatives are then cascaded to the Corporate, Business Leaders and all level of employees across DNeX Group and are monitored as Key Performance Indicators (KPIs) using balance scorecard methodology. Each division is assessed against the approved budgets and corporate objectives and justification is provided for significant variances. Monitoring The Management Committee meets on a monthly basis to deliberate on business and financial performance, operating risk and issues and to provide direction and support to business units in performing their assigned duties in an effective manner. The Management Committee discusses pertinent issues, strategy and corrective or improvement measures to be implemented, where required. The Management reports on the business, operational and financial performance of DNeX Group against the committed plans to the Audit Committee where as business related risks and its mitigation plans report to the Risk, Governance and Sustainability Committee subsequently to the Board on a quarterly basis or as and when deemed necessary. Through this mechanism, the Board is informed of all major control issues pertaining to internal control, risk taking and regulatory compliance. This will ensure that business objectives stay on course and that the Management undertakes the required remedial action within the committed timeline. Audit Internal Audit The scope of works of the internal audit function are carried out based on the internal audit plan approved annually by the Audit Committee. For the period under review, the internal auditor has checked for compliance with policies and procedures and the effectiveness of the internal control system. Any significant findings of non-compliance or recommendations for process improvement are highlighted during the quarterly Audit Committee meetings. The internal auditor plays a significant role in verifying and validating whether the Management has met its responsibilities and determining the level of compliance to internal controls. This is carried out by evaluating controls, risk management, and governance processes carried out in pursuit of the business objectives. The Audit Committee reviews the audit report that details out the internal audit observations, the internal auditor’s recommendations, Management’s responses and ascertains that appropriate and prompt remedial actions are taken by the Management. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
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