Page 81 - S P Setia Annual Report 2013
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Annual Report 2013 S P SETIA BERHAD GROUP corporate Governance | 79





statement on risk manaGement anD

internal control






BoarD resPonsiBility

The Board acknowledges that it is responsible for the Group’s system of internal control and for reviewing its adequacy and integrity. The system is
designed to provide reasonable assurance of effective operations and compliance with laws and regulations. The Board ensures the effectiveness of the
system through regular reviews.

The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives, and as such, can only provide
reasonable but not absolute assurance against material misstatement or loss.


risk manaGement

The Group’s Risk Management Framework is outlined in the Risk Management Policy. The Framework adopts a structured and integrated approach in
managing key business risks with the aim of safeguarding the shareholders’ interests and the Group’s assets.

The Group has a Risk Management Committee which is chaired by the Deputy President/Chief Operating Offcer and is primarily responsible for the risk
oversight function within the Group. The Committee coordinates the overall risk management activities within the Group and reports to the Board on
a quarterly basis on signifcant risk issues.


internal auDit function

The Group has an in-house Internal Audit department which provides reasonable assurance on the effciency and effectiveness of risk management and
internal control systems. A description of the activities of the Internal Audit function can be found in the Audit Committee report included in this Annual
Report.


internal control


The Board summarises below the process applied in reviewing the adequacy and integrity of the system of internal control:

a) The Board has appointed the Audit Committee to review the effectiveness of the Group’s system of internal control on behalf of the Board. This
is accomplished through the review of the Group Internal Audit Department’s work, which focused on areas of high priority as identifed by risk
assessment and in accordance with the annual audit plan approved by the Audit Committee.

b) The framework of the Group’s system of internal control and key procedures include the following:

• There is an organisation structure in place, which formally defnes lines of responsibility and delegation of authority.

• Key functions such as fnance, tax, treasury, corporate, legal matters and contract awarding are controlled centrally.

• There is strategic planning, annual budgeting and target-setting process, which include forecasts for each area of business with detailed reviews
at all levels of operations.
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