WASCO BERHAD 164 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL BOARD’S RESPONSIBILITIES The Board of Directors (“Board”) recognizes the importance of sound risk management and internal control practices for good corporate governance. The Board plays a crucial role in providing direction and oversight of risk management across the organization. The Group is guided by ISO 31000:2018 to support the organization at different stages of risk maturity. This involves a regular review of the adequacy of processes for identifying, evaluating, and managing significant risks through a risk management process, which includes a reporting structure. The Group’s system of internal control is designed to manage and mitigate risks appropriately, rather than eliminate the risk of failure in achieving business objectives. Given the inherent limitations of all control systems, they can only provide reasonable assurance, not absolute certainty. The Board, through the Board Sustainability Committee (“BSC”), has received reports from the Risk Management Committee (“RMC”) confirming that the Group’s risk management and internal control systems are operating adequately and effectively in all material aspects, based on the existing frameworks in place for the financial year 2024 (“FY 2024”). Based on the reports received from the RMC through the BSC and the reports from various sources (including both internal and external auditors), the Board is of the view that the risk management and internal control system in place for FY 2024 and up to the date of approval of this statement is adequate and effective in safeguarding the Group’s assets, interests of shareholders, customers, regulators and employees. In evaluating the adequacy of risk management, the Board is supported by the BSC and RMC to ensure that the risk management framework functions effectively. RISK MANAGEMENT COMMITTEE The RMC, a sub-committee of the BSC, was established by the Board to ensure that a robust risk management framework is embedded in the Group’s culture, processes, and structures. The RMC oversees the effectiveness of the Group’s policies and processes for identifying, evaluating, and managing risks. To support this, the RMC meets quarterly to review identified risks and ensure they are managed within acceptable levels. The RMC is chaired by the Chief Financial Officer and comprises members of the Senior Management Team from the Group’s major business segments. The RMC key management responsibilities includes amongst others; • Reviewing the Group Risk Management Framework, as needed, for approval by the BSC and Board; • Ensuring that the processes for identifying, assessing, treating, monitoring and reporting of all material business risks are operating as intended; • Maintaining and reviewing the Group’s top risks and segmental/business unit risk profiles with support from the Group Risk Management; • Providing guidance and direction to the Business Units on the adequacy and effectiveness of the internal control system in identifying and mitigating material business risks; and • Undertaking any other risk management tasks delegated to the committee by the BSC/Board. KEY ELEMENTS AND PROCESSES ON RISK MANAGEMENT AND INTERNAL CONTROLS The key elements and processes established for reviewing the adequacy and effectiveness of the risk management and internal control system include the following:-
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