Masteel maintains a robust Risk Management Framework (“RMF”) designed to systematically identify, assess, and manage risks across economic, environmental, social, and operational dimensions, supporting business continuity and long-term value creation. Oversight of the RMF is provided by the Risk Management Committee (“RMC”), which adopts an Enterprise Risk Management (“ERM”) approach to safeguard Masteel against potential financial losses, reputational impacts, and operational disruptions. Risk considerations are embedded into strategic planning, capital allocation, and key management decisions to ensure sustainability-related risks andopportunities are appropriately considered at both operational and Board levels. The RMC conducts regular risk assessments and provides quarterly risk updates to the Board of Directors, strengthening governance, accountability, and oversight. Emergingrisks, mitigation measures, and response strategies are continuously reviewed and integrated into corporate risk registers.

In recognition of the increasing financial and operational implications of climate change, Masteel expanded our risk management scope since FY2022 to formally incorporate climate-related risks. Therefore, we allocated a provision of approximately RM100,000 for potential ESG-related fines and settlements in FY2025, as determined by the Sustainability Committee. However, this provision was not reflected in the audited financial statements as no such fines or penalties were incurred during the financial year. This was further strengthened since 2023 with the adoption of ISSB standards, including IFRS S1 and IFRS S2, reinforcing Masteel’s commitment to transparent and consistent climate-related disclosures. Under IFRS S2, the RMC systematically identifies, evaluates, and monitors climate-related risks and opportunities, including transition risks arising from decarbonisation, regulatory changes, carbon pricing, and resource constraints, as well as physical climate risks that may impact operations and supply chains. These climate-related risks are assessed within Masteel’s ERM framework and escalated to the Board through regular reporting, ensuring that climate considerations are integrated into governance oversight, risk management, and strategic decision-making. Masteel’s climate-related risk disclosures are prepared in accordance with IFRS S2, providing stakeholders with clear, reliable,and comparable information on how climate risks are identified, managed, and mitigated.  Further details on the Masteel’s climate risk management approach and sustainability risk integration are disclosed on page 151-156 of the IFRS S1 & S2 Report and in the Annual Report