2020 UEM Edgenta Annual Report

ORGANISATIONAL STRUCTURE The organisational structure of the Group is clear and detailed, defining the roles, responsibilities and reporting line of the various Committees of the Board; Management of the Corporate Office and subsidiaries; departments and individuals. The Board appoints the MD/CEO of the Group, Chief Financial Officer, Chief Strategy Officer, Chief People Officer, Chief Digital Officer, and Heads of Divisions within the Group, as well as mission-critical positions. The organisational structure is reviewed regularly to assess its effectiveness and to ensure that it is in line with any change in business requirements. OPERATING PLANS AND STRATEGIES The Group undertakes a comprehensive annual budgeting and forecasting exercise to ensure that the development of business plans for respective business divisions are in line with the Group’s 5-year operating plan, short-term and long-term strategic plans. Each business division is responsible for carrying out a comprehensive analysis and identify the strategic priorities as part of the formation process of the Group annual operating plan, 5-year operating plan and strategic plan. It also includes the establishment of Key Performance Indicators (“KPIs”) which is deliberated and approved by the Board. The approved annual operating plan, 5-year operating plan and strategic plans are then cascaded to the senior management team across the Group’s business divisions for planning and execution. The Group monitors the business performance of respective business divisions through its KPI and measures it against the approved annual operating plan, 5-year operating plan and strategic plan on a regular basis in the management reports. The management reports, analyses and highlights variances against the plan after taking into consideration the macroeconomic sentiments and associated business risks. Similar reports and results are reviewed by the Board on a quarterly basis. The management is responsible for identifying and executing any mitigation actions, where necessary. EMPLOYEE’S AUTHORITY AND RESPONSIBILITY UEM Edgenta’s internal controls are realised and the responsibility of each employee as specified in the Job Description. The establishment of performance monitoring serves as a tool to monitor performance against the set KPIs and targets at various levels, covering key financials, customers, internal business processes and learning and growth indicators. DISCRETIONARY AUTHORITY LIMITS Clear delegation of authority is defined in the Discretionary Authority Limits (“DAL”), which sets the limit for strategic, operating and capital decisions and expenditures, as well as decision authority for each level of the management within the Group, and also the Board’s authority. The DAL is reviewed from time-to-time to ensure effectiveness of strategic and operational executions. PROCUREMENT In line with UEM Edgenta’s Digital Transformation Initiatives, we have established new SOPs for procurement aligned to the Oracle System functions encompassing eight (8) key areas, namely, Procurement Strategy & Performance, Category Management, Vendor Management, Sourcing, Purchasing Admin, Contract Management, Master Data Management, and Inventory Management. The potential risks pertaining to these key areas are mitigated through procedural governance and compliance monitoring of the SOP users. The SOPs will be reviewed periodically and updated as and when required to ensure continuous improvement of internal controls and taking into consideration any additional process improvement required. The provisions for Integrity & Compliance (i.e. Code of Conduct for Business Partner, Business Partners Letter of Declaration), HSSE Management Requirements are incorporated accordingly in the procurement terms and conditions to create awareness on our anti-bribery, anti- corruption, safety and accountability policies amongst our suppliers and contractors at the early stage of engagement with these stakeholders. UEM EDGENTA BERHAD 144 Governance STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

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