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Corporate GovernanCe
STATEMENT ON
RISK MANAGEMENT
AND INTERNAL CONTROL
1.
INTRODUCTION
The Board acknowledges that the practice of good corporate
governance is an on-going process and not just an annual
matter to be covered as compliance in the Annual Report.
The Board is committed to practise the highest standards of
corporate governance and observing best practices throughout
the Group. The Board’s Statement on Risk Management and
Internal Control is in compliance with Paragraph 15.26(b) of
the Bursa Malaysia Securities Berhad Main Market Listing
Requirements and the Statement on Risk Management and
Internal Control: Guidelines for Directors of Listed Issuers.
2.
RESPONSIBILITY
The Board recognises their responsibility for the Group’s
system of internal control, which is designed to identify and
manage the principal risks facing the business in pursuit of its
objectives, to review its adequacy and integrity and to ensure
good corporate governance. The management is accountable
to the Board for monitoring the Group’s system of internal
control and for providing assurance to the Board that it has
done so.
The system of internal control covers risk management,
financial, operational, administration, human resource,
information technology and compliance controls to safeguard
shareholders’ investments and the Group’s assets. This
system is designed to manage rather than to eliminate the
risk of failure to achieve business objectives and can only
provide reasonable but not absolute assurance against
material misstatement or loss.
The Board is of the view that the system of internal control and
risk management in place for the year under review, and up to
the date of approval of this Statement on Risk Management
and Internal Control, is sound and sufficient to safeguard the
Group’s assets, as well as the shareholders’ investments, and
the interest of other stakeholders. The Board has received
assurance from the Group Managing Director (“Group MD”)
and the Chief Financial Officer (“CFO”) that the Group’s
risk management and internal control system is operating
adequately and effectively, in all material aspects, based on
the Group’s risk management and internal control system.
3.
INTERNAL CONTROL
The key processes that the Board has established in reviewing
the adequacy and integrity of the system of internal control
and risk management systems include the following:
3.1 Operational and follow-up audits are conducted
throughout the financial year based on approved
annual audit plan to provide reasonable assurance that
the systems of internal controls and its framework, and
governance processes put in place by management
continue to operate satisfactorily and effectively
and to add value and improve the Group’s business
operations.
3.2 A meeting of Heads of Divisions which is chaired by
KFima’s Group MD is held monthly to deliberate on
the KFima Group’s financial performance, internal
audit reports, business development, legal/litigation,
operational, and corporate issues. The Group MD will
update the Board of any significant matters that require
the Board’s immediate attention.
3.3 The Group MD actively participates and involves in the
day-to-day running of the major business and regular
discussions with the senior management.
3.4 There is a budgeting and forecasting system. Each line of
business submits a business plan annually for approval
by the Board. The results of the lines of businesses
are reported monthly and variances are analysed
against budget and acted on in timely manner. The
Group’s strategic directions are also reviewed annually
taking into account changes in market conditions and
significant business risks.