Serba Dinamik Annual Report 2019

192 2019 ANNUAL REPORT CORPORATE GOVERNANCE SERBA DINAMIK HOLDINGS BERHAD NO. ELEMENT DELIBERATION C H A P T E R 0 6 6 . 2 The Board of Directors (“Board”) is committed in maintaining a sound risk management and system of internal control, and is pleased to present the following Statement on Risk Management & Internal Control for the financial year ended 31 December 2019. This Statement is made pursuant to Paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and in accordance with the Principles as stipulated in the Malaysian Code on Corporate Governance 2017 and the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers. This Statement outlines the nature and scope of risk management and internal control of the Group and covers all of the Group’s operations inclusive of associate companies. BOARD’S RESPONSIBILITY The Board has ultimate responsibility for the oversight of risk management and satisfying itself that the risk management framework is sufficiently robust and sound. In addition, the Board has overall responsibility for the Group’s risk management and internal control system and for reviewing its adequacy and effectiveness. To ensure adequacy, effectiveness and integrity of the Group’s risk management and internal control, the Board has maintained full control over governance, strategic, financial, organizational, operational, regulatory and compliance and has put in place formal lines of responsibility and delegation of authority. The Board ensures that the risk management and internal control system manages relevant and material risks in pursuit of its strategies and business objectives. The Group’s system of risk management and internal control is designed to manage rather than to eliminate the risk of failure in achieving corporate objectives. INTRODUCTION S T A T E M E N T O F R I S K M A N A G E M E N T & I N T E R N A L C O N T R O L The Board continually reviews the system to ensure that the risk management and internal control system provides a reasonable but not absolute assurance against material misstatements, financial losses or fraud. Pursuant to the above, the Board has instituted and has delegated to Audit Committee & Risk Committee (“ARC”) to uphold risk management & internal control oversight within the Group. The Board also tasks the Management to identify and assess the risks faced by the Group, and thereafter design, implement and monitor appropriate internal controls to control and mitigate those risks. THE AUDIT & RISK COMMITTEE The Terms of Reference ("TOR") of the ARC are defined under the its Report in this Annual Report and further details are disclosed under Principle B: Effective Audit and Risk Management in this Statement of the Corporate Governance Overview Statement. In specific, for Risk Management, the ARC provides oversight on risk management matters relating to activities of the Group, in respect to review, appraise and assess the efficacy of controls and progress of action plans taken to mitigate, monitor and manage overall risk exposure of the Group. For Internal Control, the ARC reviews adequacy and effectiveness of internal controls in relation to the audits conducted by the Internal Audit function during the year. In summary, internal control and risk-related matters which warranted attention of the Board were recommended by the ARC to the Board for its deliberation & approval, and matters or decisions made within the ARC’s purviewwere escalated to the Board for its notation. 1. 2.