STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL
Pursuant to Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
(“Listing Requirements”), the Board of Directors is pleased to provide the following statement on the state of
internal control of the Group, which had been prepared in accordance with the “Statement on Risk Management
& Internal Control: Guidelines for Directors of Listed Issuers”.
Board’s Responsibility
The Board of Directors is responsible for the adequacy and effectiveness of the Group’s risk management and
internal control system. The Board recognises the importance of good corporate governance and is committed
to maintaining a sound system of internal control and risk management. This includes the establishment of an
appropriate control environment and risk management framework, processes and structures and continually
reviewing the adequacy and integrity of the said systems to safeguard shareholders’ investment and the Group’s
assets. The Board is pleased to provide the following statement, which outlines the nature and scope of risk
management and internal control of the Group during the year.
The system of risk management and internal control covers finance, operations, management information
systems and compliance with relevant laws, regulations, policies and procedures. There is an ongoing process to
identify, evaluate and manage significant risk faced or potentially to be encountered by the Group. The process
is regularly reviewed by the Board.
Due to the limitations that are inherent in any system of internal controls, these systems are designed to manage,
rather than eliminate the risk of failure to achieve business objectives and it can only provide reasonable and not
absolute assurance against material misstatement or loss.
The implementation of the risk management and internal control system within the Group inclusive of design,
operation, identification, assessment, mitigation and control risks, are operatedwith the assistance of Management
throughout the period. The Board has received assurance from the Chief Executive Officer (“CEO”) and the
Finance Director (“FD”) that the Group’s risk management and internal control system is operating adequately
and effectively in all material aspects, based on the risk management and internal control system of the Group.
The key features of the risk management and internal control systems are described under the following
headings:-
Risk Management and Internal Control Structure
The Group has an ongoing process for the identification, evaluation, reporting, managing, monitoring and
reviewing of the major strategic, business and operation risks within the Group, covering both wholly and
partially owned subsidiaries. Both the Audit Committee and Board of Directors review the effectiveness of the
risk management function and deliberate on the risk management and internal control frameworks, functions,
processes and reports on a regular basis. The framework is continually monitored to ensure it is responsive to
the changes in the business environment and clearly communicated to all levels.
The Board has established a Risk Management Committee (“RMC”) which comprises the CEO, FD and senior
management to assist in the risk management process within the Group.
The Group has an established internal control structure and is committed to evaluating, enhancing and
maintaining the structure to ensure effective control over the Group’s business operations and to safeguard the
value and security of the Group’s assets. There is a clearly defined operating structure with lines of responsibilities
and delegated authority in place to assist the Board to maintain a proper control environment. The control
structure and environment are supported by the following activities:-
Pentamaster Corporation Berhad
(572307-U)
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Annual Report 2014
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