23
A
N N U A L
R
E P O R T
2 0 1 5
S
ta tement on
R
i sk
M
ana g ement &
I
nte r na l
C
ont ro l
T
he Malaysia Code on Corporate Governance
specify that the Board of Directors of public listed
companies should establish a sound risk management
framework and internal controls system to safeguard
shareholders’ investment and Group’s assets. e Board
of BHS Industries Berhad is pleased to present the
following statement on Risk Management and Internal
Control for the nancial year ended 30 June 2015. is
Statement is prepared pursuant to paragraph 15.26(b)
of the MainMarket Listing Requirements and guided by
the latest “Statement on RiskManagement and Internal
Control – Guidelines for Directors of Listed Issuers” (“the
Guideline”) endorsed by the Exchange.
Board Responsibilities
As theGroupoperates inadynamicbusiness environment,
a sound risk management and internal control system
must be in place to help the Group to achieve its business
objectives. Therefore, the Board remains committed
towardsmaintaining a sound systemof riskmanagement
and internal control and believes that a balanced
achievement of its business objectives and operational
eªciency can be attained.
Principally, the responsibilities of the Board as provided
in the Guideline for risk governance are:
•
To embed risk management in all aspects of
the Group’s activities, which also
encompass
subsidiary companies
; and
•
To review risk management framework, processes,
responsibilities and assessing whether the present
policies and systems provide reasonable assurance
that risk is managed appropriately.
e Board undertakes to identify the principal risks,
implement appropriate systems to manage risks and
review the adequacy and integrity of the Group’s systems
of internal control.
Risk Management
e Group’s risk management continues to be driven by
all Executive Directors and assisted by the management.
e Executive Directors andmanagement are responsible
for implementing the risk management processes for
identifying, evaluating, monitoring and reporting of
risks and internal control, taking appropriate and timely
corrective actions as needed, and for providing assurance
to the board that the processes have been carried out.
ese processes are embedded and carried out as part
of the Group’s operating and business management
processes. External and relevant professionals would
be drawn on to assist and provide advices to the
management team when necessary.
e Review Mechanism
In order to ensure the objectivity of the review of the
systems of internal control and risk management
framework in the Group, the Audit Committee is
instituted by the Board to undertake this role. In
conducting its review, the Audit Committee is assisted by
the Internal Auditors who report to the Audit Committee
quarterly on the state of control of the selected key
functions. Additionally, the
Audit Committee obtains
feedback from the External Auditors on the risk and
control issues highlighted by them in the course of their
statutory audit.
Management further supplements the Audit Committee
review on control and risk assessment when presenting
their quarterly nancial performance and results to the
Audit Committee. With the management consultation,
the Audit Committee reviews and analyses the interim
financial results in corroboration with management
representations on operations and the performance of
its subsidiaries as well as deliberates the integrity of the
nancial results, annual report and audited nancial
statements before recommending to the Board to be
presented to the shareholders and public investors.
Key Elements Of Internal Control
Apart from the above, the present key internal controls
and review processes in the Group are as follows:
i. Organisational structure de ning themanagement
responsibilities and hierarchical structure of
reporting lines and accountability;
ii. Limit of authority and approval facilitating
delegation of authority;
iii. Periodic performance reports for the management
monitoring and ensuring that the business
operations are progressed in accordance with the
objectives and targets;
