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095
Gamuda Berhad (29579-T) • Annual Report 2012
sTATeMenT on
inTeRnAl ConTRol
BoARD’s ResPonsiBiliTY
The Board affirms the overall responsibility for maintaining
a sound system of internal control and for reviewing their
adequacy and integrity so as to safeguard shareholders’
interests and the Group’s assets. The system of internal
control covers inter alia, financial, operational and
compliance system controls and risk management. however,
the system of internal control is designed to manage rather
than to eliminate the risk of failure to achieve business
objectives. Accordingly, the internal control system can only
provide reasonable and not absolute assurance against
material misstatement or losses. The Board confirms that
there is an on-going process of identifying, evaluating and
managing all significant risks faced by the Group that has
been in place for the year and up to the date of approval of
the Annual Report and Financial statements. The process
is regularly reviewed by the Board and is in accordance with
the statement on internal Control: Guidance for Directors of
Public listed Companies.
RisK MAnAGeMenT
The risk management framework, which is embedded
in the Company’s management systems, clearly defines
the authority and accountability in implementing the risk
management process and internal control system. The
Management assists the Board in implementing the process
of identifying, evaluating and managing significant risks
applicable to their respective areas of business and in
formulating suitable internal controls to mitigate and control
these risks.
The project task force is responsible for assessing and
evaluating the feasibility and risk impact that prospective
investments would have on the Group. For ongoing business
operations, risk assessment and evaluation is an integral part
of the annual business planning and budgeting process.
The Management of each business unit, in establishing its
business objectives, is required to identify and document all
possible risks that can affect their achievement taking into
consideration the effectiveness of controls that are capable
of mitigating such risks. By this process, each business
unit’s identified risks, the controls and processes for
managing them are tabulated in a risk assessment report.
significant risks of business units are summarised into risk
maps and presented annually to the Audit Committee for
their consideration.
KeY inTeRnAl ConTRol FeATuRes
The Group’s internal control system encompasses the
following key control processes:
• Clearly defined operating structure, lines of
responsibilities and delegated authority. Various Board
and Management Committees have been established
to assist the Board in discharging its duties. Among the
committees are:
- Audit Committee
- nomination Committee
- Remuneration Committee
- Budget Committee
- esos Committee
• Feasibility study and risk impact and assessment on new
investments / projects is evaluated by Project Task Force
for Board’s deliberation.
• internal control activities have been established in all
businessunitswithclearlydefined linesof responsibilities,
authority limits for major capital expenditure, contract
awards and other significant transactions, segregation
of duties, performance monitoring and safeguarding of
assets.
• systematically documented Policies, Procedures and
standard operating Procedures are in place to guide staff
in their day-to-day work. These policies and procedures
are reviewed regularly and updated when necessary.
• An annual budgetary process that requires business
units to prepare budgets, business plans and control
measures to mitigate identified risks for the forthcoming
year. These budgets are deliberated by the Budget
Committee before being presented to the Directors for
approval.
• A comprehensive information system comprising
budgets, key business indicators and performance
results on operations are reported to Management and
the Directors. The regular and comprehensive flow of
information allows the Management and the Directors to
review business unit’s performance against budgets and
performance indicators on monthly basis.