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Max Highway Co., Ltd., effective risk management and robust internal controls are integral to our operations and long-term success. We are committed to identifying, assessing, and mitigating risks across all aspects of our business, including toll operations, road construction, financial management, and regulatory compliance. Our proactive approach ensures that potential risks, whether financial, operational, or reputational, are carefully managed to minimize impact.

Our internal control systems are designed to maintain transparency, accuracy, and accountability in all our processes. Through regular audits, compliance monitoring, and continuous improvement of our risk management strategies, we safeguard the interests of our stakeholders while ensuring sustainable growth. By fostering a culture of responsibility and vigilance, we are dedicated to upholding the highest standards of governance and operational efficiency.

Objectives of Risk Management and Internal Control

  • Identify and Assess Risks: Proactively identify, assess, and evaluate potential risks that could impact the company’s operations, financial performance, and reputation.
  • Mitigate Risk Exposure: Develop and implement strategies to mitigate or eliminate identified risks, ensuring minimal disruption to business operations.
  • Ensure Regulatory Compliance: Maintain strict adherence to legal, regulatory, and industry standards, reducing the risk of non-compliance and associated penalties.
  • Enhance Operational Efficiency: Strengthen internal controls to optimize processes, improve productivity, and prevent operational inefficiencies.
  • Safeguard Assets and Resources: Protect the company’s financial, physical, and human resources through effective internal control measures that prevent fraud and asset misappropriation.
  • Maintain Financial Integrity: Ensure accurate financial reporting, safeguarding the integrity of financial data and preventing errors, fraud, or misstatement.
  • Promote Accountability and Transparency: Foster a culture of accountability and transparency across all levels of the organization to build trust among stakeholders.
  • Support Sustainable Growth: Align risk management and internal control practices with the company’s strategic goals, supporting long-term sustainable growth and value creation.

Framework for Risk Management

A robust risk management framework at Max Highway Co., Ltd. encompasses the following key elements:

  • Identification of Internal and External Factors:
  • Determination of Risk Appetite and Risk Management Policy:
  • Design of the Risk Management Function and Organization:
  • Establishment of Internal and External Communication and Reporting Structures:
  • Allocation of Resources to the Risk Management Function:

Risk management and Internal Control Procedures

Max Highway Co., Ltd. follows a structured approach to risk management and internal controls, ensuring the effective identification, assessment, and mitigation of risks. The procedures include:

  • Defining Risk Strategy and Appetite:
    The company establishes a clear risk strategy and determines its risk appetite, aligning risk-taking with its overall business objectives and capabilities.
  • Appointment of Risk Manager:
    The Chief Executive Officer (CEO) appoints a Risk Manager or a related position responsible for overseeing and managing the company’s risk management activities.
  • Identification of Risk Owners:
    Risk owners are designated for all significant risks across the organization, ensuring accountability and responsibility for managing those risks.
  • Setting Objectives and Control Mechanisms:
    Risk owners define meaningful, measurable objectives and implement control mechanisms, which are accepted and adhered to across the organization to manage risks effectively.
  • Centralized Risk Management Function:
    A centralized Risk Management function is responsible for establishing and maintaining risk management processes. It provides the company with a formal risk management framework and offers training programs to enhance the risk management culture and promote consistent risk terminology and concepts across the organization.
  • Regular Review by Executive Management:
    Executive Management regularly reviews reports detailing the development of significant risks and the actions taken to address those risks. This ensures that risk management strategies remain relevant and effective.
  • Reporting to the Board and Audit Committee:
    Management provides the Board and, if appropriate, the Audit Committee with comprehensive, timely, and relevant information regarding risk developments, actions, and outcomes.
  • Escalation of Critical and Emerging Risks:
    Critical, new, and emerging risks are promptly escalated to the appropriate level of management for immediate attention and necessary action.

Reviewing Effectiveness of Risk Management and Internal Control Systems

Max Highway Co., Ltd., following the principles and procedures set forth by Max Myanmar Group, ensures that risk management and internal control systems are continually reviewed for effectiveness. While embedded monitoring processes are essential, the management board must actively receive and review reports on internal control to fulfill its responsibilities. Additionally, the management board conducts an annual assessment to make a public statement on risk management and internal control systems, confirming that all significant aspects of internal control for the company have been considered during the review period, up to the approval date of the annual report.

  • Comprehensive Risk Assessment:
    The risk assessment process addresses both financial risks (such as credit, market, and liquidity risks) and non-financial risks (such as operational, legal, and environmental risks). This includes evaluating which risks are controllable by the company and which are not.
  • Balanced Reporting of Risks and Control Effectiveness:
    Reports to the management board should provide a balanced assessment of significant risks and the effectiveness of the company's risk management and internal control systems. Any significant control failings or weaknesses identified, along with their impact or potential impact, must be discussed, along with actions being taken to address them.
  • Openness in Communication:
    Open communication is essential between management and the management board regarding matters related to risk and control. This ensures that the management board is well-informed and can make decisions based on accurate and comprehensive risk-related information.
  • Annual Assessment Considerations:
    The management board’s annual assessment should specifically consider:
    a. Changes in Risks: The changes in the nature and extent of significant risks since the last assessment and the company’s ability to respond to those changes.
    b. Ongoing Monitoring and Internal Control Quality: The scope and quality of management’s ongoing monitoring of risks, the internal control system, and the work of the internal audit function, if applicable.
    c. Communication of Monitoring Results: The extent and frequency of communication regarding the results of monitoring, which enables the management board to evaluate the state of control and the effectiveness of risk management.
    d. Control Failures and Impact: Any significant control failings or weaknesses identified, and their actual or potential impact on the company’s financial performance, with an assessment of how well public reporting processes have handled these issues.
  • Employee Responsibility for Internal Control:
    All employees at Max Highway Co., Ltd. share responsibility for internal control in achieving the company’s objectives. Employees must possess the necessary knowledge, skills, information, and authority to establish, operate, and monitor the internal control system. This requires a thorough understanding of the company, its objectives, the industries and markets in which it operates, and the risks it faces.