Page 88 - S P Setia Annual Report 2016

 

 

 

 

 

Page 88 - S P Setia Annual Report 2016
P. 88

86    S P Setia Berhad Group                                 Our Business | Our Performance Review | Our Leadership and People
                Annual Report 2016                                        | Our Achievements and Accolades | Our Sustainability Statement
                                                                         | Our Governance | Our Financial Statements | Other Information




          Statement of Risk Management and Internal Controls


          THREE LINES OF DEFENCE

          The Group’s overall risk management objective is to ensure that the Group creates value for its shareholders while minimising potential
          adverse effects on its performance and positions. The Board regards risk management activities as an integral part of the Group’s business
          practices, which are carried out throughout the year under review and not in isolation.

          Our risk management and internal control are regularly reviewed to ensure they are applicable in the ever changing business landscape. The
          systems and processes that have been put in place are designed to manage our risks.


          FIRST LINE OF DEFENCE: BUSINESS AND SUPPORT UNITS


          The first line of defence is made up of the Business Units, Support Units and key Management team (the risk owners) who are accountable
          for the ownership and management of day to day operations under their respective areas of responsibilities.

          The responsibility for managing risk resides at all levels within the Group. The day-to-day project risks (such as health and safety, quality,
          marketing and statutory compliance, etc.) are mainly managed at the Business Units level and guided by approved standard operating
          procedures (“SOP”). Key business and operational risks that cut across the organisation (such as new project investments, group finance,
          contract management, quality standards and human resources, etc.) are managed at the Group level.

          Due to the nature of our business, our operational risks are identified on an ongoing basis by the Business and Support Units and concerns/
          issues are reported immediately to the relevant and authorised parties and appropriate actions will be taken to manage and mitigate the
          operational risks in a timely manner.

          The following are some of the policies and procedures that form the backbone of our risk management and internal control systems and
          processes and they are applied throughout the Business and Support Units:



             •   Proactive measures are taken to ensure we continue to   •   The Group places much emphasis on human capital
                maintain our status as Shariah-compliant securities on   management and talent management with the objective
                the Main Market of Bursa Securities. In 2016, the Group   of ensuring staff of all levels are adequately trained and
                appointed Amanie Advisor as the Group’s Shariah advisor to   competent to  carry  out their  duties  and responsibilities
                provide the necessary advice on Shariah matters.    towards achieving the Group’s objectives and goals.

             •   Authority Limit SOPs cover all Group operations and form   •   Our Group-wide health and safety policies and procedures
                the backbone of all authority limits set by the Board for   ensure a safe working environment. This is achieved through
                the Board Committees, Management and operations.    health and safety awareness-raising and training initiatives,
                The Authority Limit SOPs create clear stewardship   continuous improvement of construction methods and
                responsibilities, delegation of authorities and accountability.   communication campaigns with our appointed contractors,
                In 2016, we carried out a review of the Authority Limit SOPs   more stringent on-site controls and enforcement.
                with the objective of improving operational efficiency.
                Approval limits and approval processes were updated under   •   Various operating policies and SOPs, including codes
                the Authority Limit SOPs.                           of conduct, are established for all Business and Support
                                                                    Units.  The  Group’s policies  and procedures  are reviewed
             •   Annual business plans and operating budgets are prepared   and revised periodically to meet changing business and
                by Business Units and are approved by the Board. Key   operational needs and regulatory requirements.
                result areas and key performance indicators are established
                and aligned with the strategic business objectives and are
                monitored on a quarterly basis.



          The Group’s internal control systems do not apply to Associate Companies and Jointly-Controlled Entities where the Group does not
          have full management control over them. However, the Group’s interest is served through representation on the boards of the respective
          Associate Companies and Jointly-Controlled Entities.
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