E X C E L F O R C E M S C B E R H A D • A N N U A L R E P O R T 2 0 1 4
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
The Board of Directors is pleased to present the Statement on Risk Management and Internal Control which
outlines the nature and scope of internal control of the Group during the financial year pursuant to the Listing
Requirements of Bursa Malaysia Securities Berhad in accordance to the “Statement on Risk Management and
Internal Control – Guidance for Directors of Public Listed Companies” issued by the Institute of Internal Auditors
Malaysia, and endorsed and supported by Bursa Malaysia Securities Berhad.
The Board of Directors recognises the importance of good practice of corporate governance and is committed
to maintain a sound system of internal control to safeguard shareholders’ investments and Group’s assets. Also,
the Board is pleased to provide the following statement, which outlines the nature and scope of internal control
of the Group for the financial year ended 31 December 2014.
BOARD RESPONSIBILITY
The Board affirms its overall responsibility for maintaining the Group’s systems of internal controls and risk
management to safeguard investment, the interest of customers, regulators, employees, and the Group’s
assets. The Board further recognizes its responsibility in reviewing of the adequacy and integrity of these systems.
The Audit Committee is entrusted by the Board to ensure effectiveness of the Group’s internal control and risk
management system.
Due to the limitations that are inherent in any system of internal control, the systems of internal controls can
only provide reasonable and not absolute assurance against material misstatement or loss as it is designated to
manage rather than eliminate the risk of failure to achieve the Group’s business objectives.
RISK MANAGEMENT
The Board confirms that there is an on-going process of identifying; assessing and responding to risks to achieve
the objectives of the Group for the financial year under review. The process is in place for the year under review
and up to the date of issuance of the Statement on Risk Management and Internal Control.
As part of the Risk Management process, a Registry of Risk and the Risk Management Handbook were adopted.
The Registry of Risk is maintained to identify principal business risk and updated for on-going changes in the risk
profile. The Risk Management Handbook summarises risk management methodology, approach and processes,
roles and responsibilities, and various risk management concept.
THE KEY ELEMENTS OF THE GROUP’S INTERNAL CONTROL SYSTEM INCLUDE:
1.
Organisation structure with defined lines of responsibility, authority and accountability;
2.
Policies and procedures for key business processes are formalised and documented for implementation
and continuous improvements;
3.
Quarterly Board meetings and monthly management meetings are held where information is provided to
the Board and management covering financial performances and operations;
4.
Training and development is provided as and when required by employees with the objective of enhancing
their knowledge and competency; and
5.
Management accounts and reports are prepared regularly for monitoring of actual performance.
INTERNAL AUDIT FUNCTIONS
In accordance with the Malaysian Code on Corporate Governance, the Group in its efforts to provide adequate
and effective internal control system had appointed an independent consulting firm to review the adequacy
and integrity of its system of internal control. The independent consulting firm acts as the internal auditor and
reports directly to the Audit Committee.
The internal audit reviews address critical business processes, identified risks and internal control gaps, assessed
the effectiveness and adequacy of the existing state of internal control of the Group and recommended
possible improvements to the internal control process. This is to provide reasonable assurance that such systems
continue to operate satisfactorily and effectively within the Group. Quarterly periodic audit reports and status
report on follow up actions were tabled to the Audit Committee and Board during its quarterly meetings. For
the financial year ended 31 December 2014, the total costs incurred for the outsourced internal audit function
is RM21,832.00.
