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Statement on Risk Management
and Internal Control
Board Responsibilities
The Board acknowledges its responsibility towards the
Group to maintain a sound system of risk management
and internal control to safeguard shareholders’
investment and the Group’s assets. The Board is
responsible for reviewing the adequacy and effectiveness
of risk management and the system of internal control.
A sound risk management and system of internal control
includes the establishment of an appropriate control
environment and framework, encompassing financial,
operational and compliance controls and management
of risks throughout its operations.
Due to the limitations inherent in any risk management
and internal control system, the Group’s system is
designed to manage and mitigate risks that may impede
the Group’s achievements of its objectives rather than
eliminate these risks. Accordingly, the system of risk
management and internal control can only provide
reasonable but not absolute assurance against any
material misstatement or loss arising from the possibility
of poor judgment in decision making, management
overriding controls, loss and the occurrence of
unforeseeable circumstances. The concept of reasonable
assurance also recognises that the cost of control
procedures should not exceed the expected benefits.
The Group has in place, an ongoing process for
identifying, evaluating and managing the significant
risks faced by the Group in its achievement of objectives
and strategies.
Risk Management
The Board regards risk management as an integral part
of effective management of the business and operation
of the Group which can directly affect its ability to
implement its strategies and achieve its objectives.
Risk Management Committee
The Risk Management Committee, comprising
representatives from the Board and the Management,
assists the Board in strengthening and monitoring the
risk management practices of the Group.
This Statement is made pursuant to the Listing Requirements of Bursa Malaysia and is
guided by the Statement on Risk Management and Internal Control – Guidelines for
Directors of Listed Issuers.
Risk Management
continued ...
Risk Management Policy & Risk Profile
The Group established its Risk Management Policy and Risk
Profile in 2008. The Group’s approved Risk Management
Policy outlines the policies and procedures for implementing,
reviewing, evaluating and monitoring the principal risks of
the Group.
The approved Risk Profile, consists the principal risks
identified, strategies, controls and management actions in
addressing such risks, which include examining the business
operational risks in critical areas, potential impacts and
identifying measures and time frame to mitigate those
risks.
The Management periodically reviews the measures taken
to manage those identified risks. The results of and the
recommendations arising from the review are tabled to
the Risk Management Committee before the Risk Profile
is updated. The updated Risk Profile is deliberated by the
Risk Management Committee and thereafter it has been
presented to the Board.
Internal Controls
The Group’s internal control system encompasses the
followings:-
Authority and Responsibilities
Defined organization structure and clearly established
responsibilities and delegation of authority for the
Management and Board Committees.
Policies and Procedures
Standard Operating Policies and Procedures setting out the
operating controls pertaining to plantation, mill operation,
process and engineering, health and safety, finance, human
resource, marketing, information technology, tendering
and internal audit. These are reviewed and updated to
reflect changes in the business environment and legal
requirements.
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SARAWAK PLANTATION BERHAD
ANNUAL REPORT 2012