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Statement on Internal Control (cont’d)
Internal Audit function
The Group has in place an adequately resourced independent Internal Audit function, which provides assurance to Audit
Committee on the adequacy and integrity of risk management, internal control and governance systems. The Internal Audit
function meets the requirements of the Guidelines on Internal Audit Function released by the Institute of Internal Auditors
Malaysia in July 2002.
The Internal Audit function independently reviews the risk identification, evaluation and control processes implemented by
Management, and reports to Audit Committee on a quarterly basis the outcome thereof. The Internal Audit function also reviews
the internal control systems within the Group based on detailed annual internal audit plan duly approved by the Audit Committee.
The Internal Audit function adopts a risk-based approach and prepares its audit strategy and plan based on risk profiles of the
major business units of the Group.
Further details of activities undertaken by the Internal Audit function are set out in the Audit Committee Report on pages 62 to
64 of this Annual Report.
Other risk and control processes
Apart from risk management and internal audit, the Board has put in place an organisational structure with formally defined
lines of responsibility and delegation of authority. A process of hierarchical reporting has been established which provides for
a documented and auditable trail of accountability. The procedures include establishing limits of authority and publication of
Employees Handbook, highlighting amongst others, policies and procedures on health and safety, training and development,
equal employment opportunity, staff performance and handling misconduct. There are also established procedures for human
opportunity, staff performance and handling misconduct. There are also established financial policies and procedures for major
subsidiaries, covering core processes like tin trading activities, asset management, purchasing, payment, inventory and payroll.
These policies and procedures are relevant across Group operations and provide continuous assurance to increasingly higher
levels of Management and, ultimately, to the Board. The processes are reviewed by Internal Audit function, which provides
a degree of assurance as to operations and effectiveness of the system of internal controls. Planned corrective actions are
independently monitored for timely completion.
The Group Chief Executive Officer reports to the Board on significant changes in the business and the external environment. The
Group Chief Financial Officer provides the Board with quarterly financial information, which includes key financial indicators. This
includes, amongst others, the monitoring of results against budget, with variances being followed up and Management action
taken, where necessary. Where areas of improvement in the system are indentified, the Board considers the recommendation
made by both the Audit Committee and Management.
The Board’s commitment
The Board remains committed towards maintaining a sound system of internal controls and believes that a balanced achievement
of the Group’s business objectives and operational efficiency can be attained. The Board is of the view that there were no material
losses incurred during the financial year ended 31 December 2011 as a result of weaknesses in internal control. The Group
continues to take measures to strengthen the internal control environment.
Pursuant to Paragraph 15.23 of the Listing Requirements of Bursa Malaysia, the External Auditors have reviewed this statement
for inclusion in the Annual Report of the Group for the financial year ended 31 December 2011 and reported to the Board that
nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the
process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls.
This Statement was made in accordance with a resolution of the Board dated 26 March 2012.
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Building on Success: Developing Resources for the Future