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 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 of identified
principal risks, 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 presented to the Board.
Internal Controls
The Group’s internal control system encompasses
the following:-
Authority and Responsibilities
There is a defined organisation structure with
clearly established responsibilities and delegation of
authority for the Management and Board Committees.
Policies and Procedures
There are Standard Operating Policies and Procedures
setting out the operating controls pertaining to
plantation, mill operation, process and engineer-
ing, 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.
Planning, Monitoring and Reporting
Annual detailed budgeting is carried out whereby
operating units prepare their budgets and business
plans for consolidation and review by the
Management.
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 internal control system 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.
Statement on Risk Management
and Internal Control
SARAWAK PLANTATION BERHAD
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48
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Annual Report 2014
