ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad

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STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL 015 INTRODUCTION Pursuant to paragraph 15.26(b) of the Main Market Listing Requirement of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board of Directors of public listed companies shall include in its annual reports a statement about the risk management and internal control of the Company prepared in accordance with the guidelines on Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers. RESPONSIBILITIES OF THE BOARD The Board is responsible and committed to fulfill its responsibility to maintain a sound system of risk management and internal control in compliance with the Malaysian Code on Corporate Governance 2012 to safeguard the interest of the shareholders and the assets of the Group. Risk management and internal control form the integral part of the overall management process. In view of the limitations inherent in any system of risk management and internal controls, the system is designed to identify, assess and respond to risk to achieve the Group’s objectives rather than to eliminate risk in totality. Therefore the system can only provide reasonable but not absolute assurance against the likelihood of material misstatement, fraud and loss. The Board has established an ongoing process to continuously identify, evaluate and manage the significant risks faced by the Group. This process has been in place for the year under review and up to the date of approval of this statement. In addition, the Board regularly reviews the adequacy, integrity and effectiveness of the Group’s system of risk management and internal control. RISK MANAGEMENT The Board is committed to ensure that the implementation of appropriate processes to effectively identify, evaluate and manage practical risks of the Group and to mitigate the effects of the key risks on the Group’s business and corporate objectives. Whilst the Board has established key risk management and internal control policies and maintains ultimate control over risk and control matters, the implementation of the risk management and internal control system within the established framework has been delegated to the executive management. The Board is being assisted by the Audit Committee in reviewing the adequacy and effectiveness of the risk management and internal control system. INTERNAL AUDIT FUNCTION The Group’s internal audit function has been outsourced to an independent professional firm, who reports directly to the Audit Committee and administratively to the Management. The internal auditors carried out periodic internal audit on the internal control system and reported the findings to the Audit Committee. Significant non-compliances and internal control weaknesses noted during the audit were reported to the Audit Committee. This will ensure the business processes and internal controls of the Group are continuously assessed and evaluated for statutory compliance and data integrity in addition to ensure compliance with applicable laws and regulations. The Audit Committee reports to the Board on significant audit findings and recommends the necessary rectification actions. The total cost incurred for the internal audit function of the Group for the financial year ended 31 December 2012 amounted to RM24,000.
016 STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL INTERNAL CONTROL The key elements of the Group’s system of internal controls are elaborated below: (a) Authority and responsibility There is a properly defined management structure with formally defined lines of responsibility and delegation of authority for all aspect of the Group’s activities including the delegation of responsibilities to the committees of the Board, the management and the operating units. Assessment of the effectiveness of the structure is carried out on a continuous basis. (b) Policies and procedures Written policies and procedures are being established and properly disseminated. Regular reviews are carried out to update the policies and procedures with changing operating and risk environment. (c) Regular review by management Management conducts review of subsidiaries’ results and performances via management meetings on an ongoing basis where key areas of concern will be highlighted to the Board. (d) Internal audit Review by internal auditors of the internal control system of the Group in managing the key risks identified and also to ensure compliance with the policies and procedures of the Group. (e) Planning, monitoring and reporting The Audit Committee comprises all independent non-executive directors of the Board and is responsible for reviewing quarterly announcement, statutory annual financial statements prior to submission for Board’s approval, internal and external audit reports and also ensure legal updates are highlighted and followed through. The Audit Committee has unrestricted access to both the internal and external auditors to discuss the areas of concern in discharging their responsibilities. ASSURANCE TO THE BOARD Pursuant to the requirement of the guidelines, the Board has obtained assurance from the Chief Executive Officer and Chief Financial Officer that the risk management and internal control system of the Group is operating adequately and satisfactory, in all material aspects, to meet the Group’s objectives during the financial year. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS Pursuant to paragraph 15.23 of the Main Market Listing Requirement of Bursa Securities, this statement has been reviewed by the external auditors for the inclusion in the annual report of the Group for the financial year ended 31 December 2012. CONCLUSION The Board is of the opinion that the risk management and internal control system is sufficient to provide a reasonable assurance that the system is adequate and satisfactory and have not resulted in any material losses, fraud or misstatement that would require disclosure in the annual report of the Group. As the development of an effective and efficient risk management and internal control system is an ongoing process, the Board reaffirmed their commitments to take the necessary measures to strengthen the risk management and internal control environment of the Group. This statement is made in accordance with the resolution of the Board of Directors dated 25 April 2013.
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ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad

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