Malaysia Airports Holdings Berhad 188 >> Our Governance S t a t e m e n t o n R i s k Ma n a g e m e n t a n d I n t e r n a l C o n t r o l The Board through the BRMC and other relevant Board Committees, monitors and reviews the controls and action plans taken by Management to address the key risks at a minimum on quarterly basis. KEY ELEMENTS OF THE RISK MANAGEMENT AND INTERNAL CONTROL The Group’s internal control system is embedded within the operating activities and Board’s review of internal control effectiveness, centred on the COSO framework, is based on information from: • Key management within the organisation with the responsibility for the development andmaintenance of the risk management and internal control framework; • The work of the Internal Auditors, who submit regular reports to the Board Audit Committee which include their independent and objective opinion on the adequacy and effectiveness of the organisation’s systems of risk management and internal control together with recommendations for improvement; and • Comments made by the External Auditors in their Management Letter and other reports. STRATEGIC CHALLENGES: Operating Agreement (OA) – Unfavourable Terms Terms of the new OA have a significant bearing to MAHB’s business model. Thus, this may impact the operations and financials of the Group if the terms were unfavourable. Preservation of the networked-based operating model of Malaysia Airports The airports under Malaysia Airports is managed on a cross subsidisation model as more than 75% of the networked airports were not commercially viable. Any model whereby a profitable airport(s) or business is taken out of the network would jeopardise the ability of the Group to cross subsidise the rest. MITIGATION MEASURES: Malaysia Airport have been continuously engaging relevant stakeholders i.e. Ministry of Transport, Ministry of Finance, Malaysian Aviation Commission (MAVCOM), Civil Aviation Authority of Malaysia (CAAM) etc. regarding the OA on an ongoing basis. Expected target for the new OA to be signed is the second half of 2021. Besides this, Malaysia Airports also continuously ensured alignment with key stakeholders on Malaysia Airports’ corporate priorities and constantly on the look out to identify and establish new relationships and opportunities with potential key stakeholders. Achieving awards and recognitions from international industry organisations and via independent surveys that reflected Malaysia Airports’ solid operational capabilities and credibility in managing airports.
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