Wah Seong Corporation Berhad Annual Report 2017

GOVERNANCE WAH SEONG CORPORATION BERHAD ANNUAL REPORT 2017 61 RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK The RMC principally develops, executes and maintains the risk management system to ensure that the Group’s corporate objectives and strategies are achieved within the acceptable risk appetite of the Group. Its reviews cover responses to significant risks identified including non-compliance with applicable laws, rules, regulations and guidelines, changes to internal controls and management information systems, and output from monitoring processes as well as continual review process of identified risks and effectiveness of mitigation strategies and controls. REVIEW OF THIS STATEMENT As required by Paragraph 15.23, Chapter 15 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the external auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance review was performed in accordance with Audit and Assurance Practice Guide (“AAPG”) 3 issued by the Malaysian Institute of Accountants. AAPG 3 does not require the external auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Risk Management and Internal Control Framework Diagram Review and Monitoring Communication and Consultation Step 2: Risk Identification • Identify internal and external significant risk • Recognise risk areas • Risk Categories Step 5: Risk Treatment • Accept • Avoid • Transfer • Reduce Likelihood and/ or Impact Step 3: Risk Assessment • Gross Risk Assessment • Net Risk Assessment • Likelihood, Impact and Risk Matrix Step 1: Establish the Context • Key objectives for risk management • Risk Appetite Step 4: Risk Evaluation • Evaluate acceptable or unacceptable risks • Prioritise risks for treatment