Wah Seong Corporation Berhad Annual Report 2017

GOVERNANCE WAH SEONG CORPORATION BERHAD ANNUAL REPORT 2017 59 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL BOARD RESPONSIBILITY The Board of Directors (“Board”) recognises the importance of sound risk management and internal control practices for good corporate governance. The Board affirms its responsibility for ensuring the Group’s system is able to adequately and effectively manage significant risks. The Group has in place an ongoing process for identifying, evaluating and managing significant risks through a framework which includes a reporting structure. This is supported through a Risk Management Committee (“RMC”) that meets regularly, receiving risk management updates and taking necessary actions to ensure that risks are managed within the acceptance levels of the company within which they reside. The Group’s system of internal control is designed to manage and control risks appropriately, rather than eliminate the risk of failure to achieve business objective. Due to the inherent limitations in all control systems, these control systems can only provide reasonable and not absolute assurance. The Board has received reports from the RMC that the Group’s risk management and internal control system is operating adequately and effectively in all material aspects based on the existing risk management and internal control system of the Group. Based on the reports received from the RMC and the assurance reports from various sources (including both internal and external auditors), the Board is of the view that the system of risk management and internal control in place for the year under review and up to the date of issuance of this Annual Report is adequate and effective to safeguard shareholders’ interest in the Group, interest of customers, regulators, employees and the Group’s assets. In addition, the Board also received assurance from the Group Chief Executive Officer, Chief Financial Officer of the Oil & Gas Division and Head, Finance, Industrial Services Division that the Group’s risk management and internal control system is operating adequately and effectively in all material aspects, based on the risk management model adopted by the Group. RISK MANAGEMENT COMMITTEE The RMC being the sub-committee of the Audit Committee was established by the Board towards ensuring a sound system of risk management and control framework is embedded into the culture, processes and structures of the Group. The RMC provides oversight on the effectiveness of the Group’s policies and processes in identifying, evaluating and managing the Group’s risks. The RMC is headed by the Deputy Managing Director and made up of the Heads/CEOs of the Group’s business divisions. The principal responsibilities of the RMC includes: • Reviewing the Group Risk Management Policy and Framework, as and when necessary, for approval by the Audit Committee and the Board; • Ensuring that the processes to identify, assess, treat, monitor and report on all material business risks are functioning as designed; • Reviewing risk reports of the Business Division/Units; • Providing guidance and direction to the Business Units on the adequacy and effectiveness of internal control system for the identification and mitigation of material business risks; and • Establishing procedures for the identification of and compliance with relevant laws, licensing and regulatory requirements.