Pg 147 - Berjaya Corporation Berhad

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statement oninternal controlResponsibilityThe Board of Directors of Berjaya Land Berhad (“BLand” or “theGroup”) recognises that it is responsible for the Group’s system ofinternal control and for reviewing its adequacy and integrity. TheBoard’s responsibility in relation to the system of internal controlextends to all subsidiaries of the Group. Notwithstanding, due tothe limitations that are inherent in any system of internal control,the Group’s internal control system is designed to manage ratherthan eliminate the risk of failure to achieve business objectives.As such, the system can only provide reasonable but not absoluteassurance against material misstatement or loss.The Board’s primary objective and direction in managing theGroup’s principal business risks are to enhance the Group’sability to achieve its business objectives. In order to measure theachievement of the business objectives, the Board monitors theGroup’s performance and profitability at its Board meetings andprovides feedback to the Executive Directors.In line with the Malaysian Code of Corporate Governance, andas part of the Company’s plans to further enhance the Group’ssystem of internal control, the Board tasked the Risk ManagementCommittee (“RMC”) with the overall responsibility to regularlyreview and monitor the risk management activities of the Groupand to approve appropriate risk management procedures andmethodologies. The members of the RMC are as follows:• Tan Sri Dato’ Thong Yaw Hong (Chairman)• Dato’ Robin Tan Yeong Ching• Datuk Robert Yong Kuen Loke• Khor Poh Waa• Dato’ Mohammed Adnan bin Shuaib• Ng Sooi Lin (Alternate to Dato’ Robin Tan Yeong Ching)The RMC terms of reference include, inter alia:• To ensure that the strategic context of risk managementstrategy is complete• To determine the overall risk management processes• To ensure that the short and long term risk managementstrategy, framework and methodology are implemented andconsistently applied by all business units• To ensure that risk management processes are integrated intoall core business processes• To establish risk reporting mechanism• To ensure alignment and coordination of assurance activityacross the organisation• To act as a steering committee for the group wide riskmanagement programmeFor the financial year ended 30 April 2006, the RMC held twomeetings where it reviewed the overall risk management frameworkand established the Risk Management Working Committee thatwill monitor the implementation of Risk Management policy withinthe BLand’s Group of unlisted subsidiary companies. The RMCalso evaluated the adequacy of risk management activities of theProperty Division and the Leisure Division (as defined below) andrecommended certain measures to be adopted to reduce thierbusiness risk exposure.Management Style and Control ConsciousnessThe Group’s operations are divided into three main divisions:• Vacation Timeshare, Hotels, Resorts and RecreationDevelopment (“Leisure Division”);• Property Investment and Development (“Property Division”);and• Gaming and Lottery Management (“Gaming Division”).Paramount to the Group’s system of internal control is the roleplayed by the Executive Directors as the channel of communicationbetween the Board and Management. The Executive Directors whoare assigned to manage the businesses of the Group implementthe Board’s expectations of the system of internal control.The Executive Directors, together with their respective managementteam, attend various management and operations meetings andreview financial and operations reports, in order to monitor theperformance and profitability of the Group’s businesses. The Groupalso prides itself in the “open-door” and “close-to-operations”policy practised by the Executive Directors and Management. Anymatters arising are promptly and efficiently dealt with by drawingon the experience and knowledge of employees throughout theGroup.Both the Leisure and Property Divisions have in place stringentprocesses to ensure that employees understand the importanceAnnual Report 2006Berjaya Land Berhad (201765-A)28
of and adhere to the policies and procedures that are outlined inthe respective divisions’ system of internal control. Among suchprocesses are the Daily Morning briefing meetings and customerfeedback evaluation at the Leisure Division’s hotels, and variousSite and Project meetings with Consultants and the TenderCommittee’s review and recommendation of contractors at theProperty Division.The Group’s Gaming Division operates through its associatedcompanies, Berjaya Sports Toto Berhad (“BToto”) and MatrixInternational Berhad (“Matrix”). The Board has a process in placewhereby representatives of the Group sit on the Boards of BTotoand Matrix respectively, to serve the Group’s interests.The Board does not regularly review the internal control system ofits other associated companies although management accountsare provided for information, as the Board does not have anydirect control over their operations.Key Features of the Internal Control SystemSome of the identified key features of the Group’s system ofinternal control include:• Timely financial and operations reports• Scheduled operations and management meetings• Standard operating procedures for the Leisure Division• Clear organisation structure and delineated reporting lines• Defined levels of authority• Capable workforce with ongoing training efforts• Formal employee appraisal system which enables appraisal ofemployees and rewarding employees based on performance• Centralised procurement function that ensures approvalprocedures are adhered to, as well as to leverage on theGroup’s purchasing power• Payment functions controlled at Head Office• Independent assurance on the system of internal control fromregular internal audit visitsAssurance MechanismThe Board has assigned the Audit Committee with the duty ofreviewing and monitoring the effectiveness of the Group’s internalcontrol. The Audit Committee receives assurance reports fromboth the internal and external auditors. The Internal Audit functionfurnishes the Audit Committee with reports from visits conducted atvarious operating units. The external auditors provide assurance inthe form of their annual statutory audit of the financial statements.Further, any case for improvement identified during the courseof the statutory audit by the external auditors are brought to theattention of the Audit Committee through management letters, orare articulated at Audit Committee meetings.The Board also reviews the minutes of meetings of the AuditCommittee. The Report of the Audit Committee is set out onpages 22 to 24 of the Annual Report.The Board remains committed towards operating a sound systemof internal control and therefore recognises that the systemmust continuously evolve to support the type of business andsize of operations of the Group. As such, the Board, in strivingfor continuous improvement will put in place appropriate actionplans, when necessary, to further enhance the Group’s system ofinternal control.Berjaya Land Berhad (201765-A) Annual Report 200629
Page 2 and 3: The corporate logo comprises the wo
Page 4 and 5: corporateinformationBOARD OF DIRECT
Page 6 and 7: profile ofdirectorsDATO’ ROBIN TA
Page 8 and 9: profile ofdirectorsKHOO WEI TONG @
Page 10 and 11: profile ofdirectorsDR. RAMACHANDRAN
Page 12 and 13: chairman’sstatementiv.On 23 Decem
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Page 16 and 17: ceo’s reviewof operationsKL Plaza
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Page 20 and 21: BERJAYA Land BERHADVacation Timesha
Page 22 and 23: group financialsummaryDescription 2
Page 24 and 25: audit committeereportThe Board of D
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Page 28 and 29: statement oncorporate governance(iv
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notes to thefinancial statements30
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list ofpropertiesas at 30 April 200
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materialcontractsOther than as disc
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groupaddressesArena Green Apartment
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ecurrent related partytransactions
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statistics on shares andconvertible
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statistics on shares andconvertible
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notice ofannual general meetingNOTI
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statement accompanyingnotice of ann
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Fold this flap for sealingAffix Sta
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Pg 147 - Berjaya Corporation Berhad

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