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F i m a C o r p o r at i o n B e r h a d ( 2 1 1 8 5 - P ) •
A n n u a l R e p o r t 2 0 1 8
AND INTERNAL CONTROL
STATEMENT ON RISK MANAGEMENT
1.
INTRODUCTION
The Board acknowledges that the practice of good corporate governance is an on-going process and not just an annual
matter to be covered as compliance in the Annual Report. The Board is committed to practise the highest standards of
corporate governance and observing best practices throughout the Group. The Board’s Statement on Risk Management
and Internal Control is in compliance with Paragraph 15.26(b) of the Bursa Malaysia Securities Berhad Main Market Listing
Requirements and the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.
2.
RESPONSIBILITY
The Board recognises their responsibility for the Group’s system of internal control, which is designed to identify and manage
the principal risks facing the business in pursuit of its objectives, to review its adequacy and integrity and to ensure good
corporate governance. The management is accountable to the Board for monitoring the Group’s system of internal control
and for providing assurance to the Board that it has done so.
The system of internal control covers risk management, financial, operational, administration, human resource, information
technology and compliance controls to safeguard shareholders’ investments and the Group’s assets. This system is designed
to manage rather than to eliminate the risk of failure to achieve business objectives and can only provide reasonable but not
absolute assurance against material misstatement or loss.
The Board is of the view that the system of internal control and risk management in place for the year under review, and up
to the date of approval of this Statement on Risk Management and Internal Control, is sound and sufficient to safeguard the
Group’s assets, as well as the shareholders’ investments, and the interest of other stakeholders. The Board has received
assurance from the Managing Director and the Financial Controller that the Group’s risk management and internal control
system is operating adequately and effectively, in all material aspects, based on the Group’s risk management and internal
control system.
3.
INTERNAL CONTROL
The key processes that the Board has established in reviewing the adequacy and integrity of the system of internal control and
risk management systems include the following:
3.1 Operational and follow-up audits are conducted throughout the financial year based on approved annual audit plan to
provide reasonable assurance that the systems of internal controls and its framework, and governance processes put
in place by management continue to operate satisfactorily and effectively and to add value and improve the Group’s
business operations.
3.2 A meeting of Heads of Divisions which is held by the penultimate holding company, Kumpulan Fima Berhad (“KFima”)
and chaired by the KFima’s Group Managing Director (“Group MD”) is held monthly to deliberate on the KFima Group’s
financial performance, internal audit reports, business development, legal/litigation, operational and corporate issues.
The Group MD will update the Board of any significant matters that require the Board’s immediate attention.
3.3 The Managing Director actively participates and involves in the day-to-day running of the major business and regular
discussions with the senior management.
3.4 There is a budgeting and forecasting system. Each line of business submits a business plan annually for approval by the
Board. The results of the lines of businesses are reported monthly and variances are analyzed against budget and acted
on in timely manner. The Group’s strategic directions are also reviewed annually taking into account changes in market
conditions and significant business risks.