In addition, the Board remains committed towards
operating an effective risk management framework
and a sound system of internal control and recognises
that these must continuously evolve to support
the type of business and size of operations of the
Group. As such, the Board, in striving for continuous
improvement will put in place proper action plans,
when necessary, to further enhance the Group’s
system of risk management and internal control.
The Group’s system of risk management and internal
control applies to the Company and its subsidiaries
only and does not cover its associated company.
The Board has received assurance from the Group
Managing Director and the Chief Financial Officer
that the Group’s risk management and internal control
system are operating adequately and effectively, in
all material aspects, based on the risk framework
adopted by the Group.
Review of the Statement by External
Auditors
The external auditors have reviewed this Statement
on Risk Management and Internal Control pursuant
to the scope set out in Recommended Practice
Guide (“RPG”) 5 (Revised), Guidance for Auditors
on Engagements to Report on the Statement on
Risk Management and Internal Control included in
the Annual Report issued by the Malaysian Institute
of Accountants (“MIA”) for inclusion in the annual
report of the Group for the year ended 31 December
2014, and reported to the Board that nothing has
come to their attention that caused them to believe
that the statement to be included in the annual
report of the Group, in all material respects:
(a) has not been prepared in accordance with the
disclosures required by paragraphs 41 and 42
of the Statement on Risk Management and Internal
Control Guidelines for Directors of Listed Issuers or
(b) is factually inaccurate.
RPG 5 (Revised) does not require the external
auditors to consider whether the Directors’
Statement on Risk Management and Internal
Control covers all risks and controls, or to form
an opinion on the adequacy and effectiveness of
the Group’s risk management and internal control
system including the assessment and opinion by
the Board of Directors and management thereon.
The auditors are also not required to consider
whether the processes described to deal with
material internal control aspects of any significant
problems disclosed in the annual report will, in
fact, remedy the problems.
This statement is made in accordance with
the resolution of the Board of Directors dated
10 April 2015.
Internal Controls
(continued)
The consolidated management budget is thereafter
aligned to the corporate objectives and strategies
of the Group and presented to the Board for
deliberation and approval.
Management performance reports are prepared
for review by the Board on a quarterly basis. Any
significant deviation from the budget and parameters
set by the Board would be investigated, explained
and presented to the Board.
Management meetings are held to review the
Group’s operations. This review includes analysing the
performance of the Group and addressing the key
operational issues faced thereby.
Key Performance Indicators (KPIs), which are based
on the Corporate Balanced Scorecard approach,
are used to track and measure staff performance.
Internal and external audits are conducted twice in
every three years on our SP Lab, in accordance with
predetermined schedules and procedures, to verify
that its operations comply with the requirements of
the management system and MS ISO/IEC: 17025:2005
standard. The internal audits are conducted by
certified auditors appointed by the Group whereas
the external audits are conducted by Department of
Standards Malaysia.
Internal Audit and Board Audit Committee
The Internal Audit Department reports directly to
the Board Audit Committee on a quarterly basis, the
results of works carried out in accordance with
its Audit Plan as approved by the Board Audit
Committee. The internal audit function performs
periodic reviews on critical business processes to
identify any significant risks, assess the effectiveness
and adequacy of the system of internal control
and where necessary, recommends areas for
improvements.
The Board Audit Committee receives Board reports
from both internal and external auditors. The Audit
Committee regularly reviews the reports and holds
discussions with the Management on the actions
taken on identified internal control issues.
Deliberations and recommendations by the Board
Audit Committee are presented to the Board at
the latter’s scheduled meetings.
Conclusion
The Board confirms that its risk management and
internal control system are operationally adequate
and effective throughout the year under review and
up to the date of approval of the Annual Report.
SARAWAK PLANTATION BERHAD
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49
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Annual Report 2014
Statement on Risk Management
and Internal Control
