Notes to the Financial Statements - Cahaya Mata Sarawak Bhd

Responsibility
The Board recognises its responsibilities for and the importance of sound internal controls and risk management
practices, and for reviewing the adequacy and integrity of those systems. It should be noted, however, that such
systems are designed to manage rather than eliminate risk. In addition, any system can only provide reasonable,
and not absolute, assurance against material misstatement or loss.
The Board does not regularly review the risk management and internal control systems of its associated companies
as it does not have direct control over their operations. The Company’s interests are served through representation on
the Boards of the associated companies and the receipt of quarterly fi nancial reports thereon. These representations
also provide the Board with information to assess the performance of the Group’s investments.
The Board has established procedures to implement the recommendations of Bursa Securities LR’s “Statement
on Internal Control: Guidance for Directors of Public Listed Companies”. These procedures, which are subject to
regular review, are intended to provide an ongoing process for identifying, evaluating and managing the signifi cant
risks faced by the Group.
Risk Management
Risk Policy
Risk management is regarded by the Board as an integral part of the business operations. Management at all
levels have a collective responsibility for creating a risk aware culture and ensuring that business risk assessment
becomes an explicit part of both management and the Strategic Business Unit (“SBU”) / CMS Board level decision
making process. Management also has responsibility for managing risks and ensuring appropriate control measures
are in place or being developed to mitigate signifi cant risks identifi ed and ensuring compliance with applicable laws
and regulations.
The main underlying principles of the Group risk policy are:
• Informed risk management is an essential element of the CMS / SBU / subsidiary strategy.
• Effective risk management provides greater assurance that the Group’s strategy and business objectives will
be achieved without major surprises.
• Each SBU (and business unit therein) and subsidiary company are responsible for managing risks that can
impact the achievement of their business objectives.
• All signifi cant risks are to be identifi ed, analysed, prioritised, monitored and reported.
Risk Reporting
Statement on Internal Control
The Malaysian Code on Corporate Governance requires listed companies to maintain a sound
system of internal control to safeguard shareholders’ investments and the Company’s assets.
This Statement prepared in accordance with paragraph 15.26(b) of the Main Market Listing
Requirements (“LR”) of Bursa Securities has been approved by the Board and reviewed by
the external auditors as required under paragraph 15.23 of the LR. Based on their review, the
external auditors have reported to the Board of Directors (“Board”) that nothing has come to their
attention that causes them to believe that this Statement is inconsistent with their understanding
of the process the Board has adopted in the review of the adequacy and integrity of the internal
control systems of the Group.
The Group’s risk management process provides for regular review, reporting and monitoring. In addition to the
monthly operations performance reviews focused on monitoring the achievement of fi nancial objectives and other
key performance indicators, the main elements of the risk reporting process are:
• Presentation of a summary of the signifi cant risks to the Group Risk Committee / Board of Directors on a
quarterly basis.
• Reporting of signifi cant risks by SBU and subsidiaries in their annual management plans.
• Reporting of signifi cant risks by SBU and subsidiaries on a quarterly basis to the holding company.
• Review and monitoring of key risks during the management meetings of the business units.
Annual Report 2011 57