PRG Holdings Berhad Annual Report 2018

2018 A N N U A L R E P O R T 50 statement on risk management and internal control (continued) Corporate, Property Development & Construction and Healthcare Divisions: • Compliance audit on delegated authority limit (Financial and Non-Financial) • Compliance audit on compliance with organisation policies, contracts, laws and regulations • Risk-based audit on the identified key risk areas of the Property Development Division including: (i) Uncertainty of economy (ii) Liquidity risk (iii) Credit risk (iv) New project funding (v) Sustainability (vi) Filing, documentation and data storage (vii) Project management risk (viii) Operation cash flow & liquidity risk (ix) Limited financial resources for new land banks & project (x) Change in interest rate • Risk-based audit on the identified key risk areas of the Construction Division including: (i) Project management risk (delay risk) (ii) Government policy (iii) ISO certification • Identified key risk areas of the Healthcare Division including: (i) Litigation and reputation (ii) Dependency on key personnel (iii) Alliance risk (iv) Industry risk (v) Competitive market & slowdown in business The findings arising from the above reviews have been reported to the Management for their response and subsequently for the Audit Committee deliberation. Where weaknesses were identified, recommended procedures have been implemented or are being addressed to strengthen controls. Other Key Elements of Internal Control Other key elements that provide effective internal control include: • The Group has established an organisation structure with clearly defined lines of responsibility, accountability, authority and reporting. • The business plan and annual budget are prepared and presented to the Board for review and approval. • Standard Operating Procedures which includes policies and procedures within the Group are continuously reviewed and updated. • Performance reports are provided quarterly to the Directors and discussed at Board meetings. The Board receives from the management reports covering quarterly financial performance and other corporate matters. • Monthly management accounts and reports are prepared to facilitate effective monitoring and decision making. • On-going trainings and educational programs are identified and scheduled for all staff to acquire the necessary knowledge and competency to meet their performance and job expectations.