KUMPULAN FIMA ANNUAL REPORT 2019

Statement on Risk Management

and Internal Control

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 (“Bursa”) Main Market Listing Requirements (“Listing Requirements”) and the

Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.

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.

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 Dato’ Roslan bin Hamir 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 businesses and

regular discussions with the senior management.

Kumpulan Fima Berhad

(11817-V)

Annual Report 2019