Annual Report 2014 | S P SETIA BERHAD GROUP | 93
STATEMENT ON RISK
IV. Corporate Governance
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.
The Board is pleased to disclose that there is an ongoing process for identifying, evaluating and managing significant risks faced by the Group
throughout the financial year.
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.
In September 2014 the Board has reorganized the composition of the Risk Management Committee in line with the best practices as outlined
in the Statement on Risk Management and Internal Control. The Committee consists of at least three (3) Board members, two (2) of whom are
independent non-executive directors. The Committee is to be chaired by the independent non-executive director.
The Committee coordinates the overall risk management activities within the Group and reports to the Board on a quarterly basis on significant
Internal Audit Function
The Group has an in-house Internal Audit Department, known as Governance Advisory Department, which provides reasonable assurance on
the efficiency 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.
The Board summarises below the process applied in reviewing the adequacy and integrity of the system of internal control:
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 Governance Advisory Department’s work, which focused on areas of high priority
as identified by risk assessment and in accordance with the annual audit plan approved by the Audit Committee.
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 defines lines of responsibility and delegation of authority.
• Key functions such as finance, tax, treasury, corporate, legal matters and contract awarding are controlled centrally.