DAVID LOW KOK LEONG
4. ACCOUNTABILITY AND AUDIT
a. Financial Reporting
In presenting the annual audited financial statements to shareholders and the announcement of quarterly financial results, the Board takes appropriate steps to present a true and fair view of the financial statements of the Company and its subsidiaries.
b. Internal Control
the Board has the overall responsibility for maintaining a sound system of internal control to safeguard shareholders’
investment and Group’s assets by identifying principal risks and ensuring the implementation of appropriate systems to manage these risks; and reviewing the adequacy and integrity of the internal control system.
the Statement on Internal Control provides an overview of the state of internal controls within the Group and is set out on pages 34 of this annual report.
c. Relationship with the Auditors
through the audit Committee, the Company has established a transparent and appropriate relationship with the Group’s external and internal auditors. From time to time, the auditors highlight to the audit Committee and the Board on matters that require Board’s attention.
the role of the audit Committee in relation to the external auditors is stated under the terms of reference of the audit Committee on pages 26 to 28..
tHe Group reCoGnIzeS tHe IMportanCe oF ConDuCtInG ItS BuSIneSSeS In a SoCIallY anD reSponSIBle Manner. altHouGH tHe Group IS InVolVeD In a nuMBer oF DIFFerent InDuStrIeS, It IS neVertHeleSS HelD toGetHer BY a CoMMon BelIeF tHat tHe unDertaKInGS oF tHe Group WIll BeneFIt ItS CuStoMerS, eMploYeeS, SHareHolDerS, BuSIneSS aSSoCIateS anD tHe SoCIetY alIKe. to tHIS enD, tHe Group IS CoMMItteD In FulFIllInG ItS Corporate reSponSIBIlItY In tHe FolloWInG areaS:
corporate social responsibility
a. The Marketplace
the Group believes in providing its customers and clients with good quality products and services and be always ready to walk the extra mile for them.
b. The Workplace
employees are provided with a safe and healthy working environment where amongst others, safety gears are provided and equipment and facilities put in place to ensure that all working areas are hazard free. employees also enjoy limited free outpatient treatment at designated clinics. the Group also recognizes the value of training for its employees and employees are periodically sent for training and seminars at the Group’s expense.
c. The Environment
the Group encourages the use of renewable energy; using where available bio-mass to fire its boilers. all palm oil mills employ effluent treatment system which is carefully monitored to comply with environmental laws.
d. The Community
the Group periodically supports charitable and social causes such as school building projects and orphanage homes.
statement on internal control
INTRODUCTION
tHe MalaYSIan CoDe on Corporate GoVernanCe reQuIreS puBlIC lISteD CoMpanIeS to MaIntaIn a SounD SYSteM oF Internal Control to SaFeGuarD SHareHolDerS’ InVeStMentS anD tHe Group’S aSSetS. In aDDItIon, tHe DIreCtorS oF a puBlIC lISteD CoMpanY are alSo reQuIreD BY paraGrapH 15.27(B) oF tHe lIStInG reQuIreMentS oF BurSa MalaYSIa SeCurItIeS BerHaD to InCluDe In ItS annual report a “StateMent aBout tHe State oF Internal Control oF tHe lISteD ISSuer aS a Group.”
DIRECTORS’ RESPONSIBILITY
as Southern acids (M) Berhad’s Board of Directors, our primary role is to set out the strategic direction of the Group and to oversee its operations by providing a framework where the Group’s affairs could be directed and managed in a manner that would enhance business prosperity and corporate accountability with the ultimate objective of realizing long term shareholder value, whilst taking into account the interests of our other stakeholders,
the Board affirms its commitment to maintain a sound system of internal control and to seek regular assurance on the adequacy and the integrity of the internal control system to safeguard shareholders’ investment and the Group’s assets. to achieve this, the Board strives to ensure that the internal control system that has been put in place by the Management is adequate and operating at satisfactory levels to manage the risks that the Group is exposed to. the adequacy and integrity of the internal control system is monitored through independent examinations and appraisals that are done by both the internal and external auditors.
the Board also recognises that in view of the limitations inherent in any system of internal control, the systems put in place are designed to mitigate rather than to eliminate risks.
During the financial year under review and up to the date of the 2008 annual report and Financial Statements are approved, the Board confirms that there is an ongoing process for identifying and managing the significant risks faced by the Group. the process is reviewed by the Board through the audit Committee which is assisted by the internal audit function.
the key processes that the Board has established to review the adequacy and integrity of the system of internal control are as follows:
1) a formal organisation structure for the individual companies in the Group.
2) regular management reports to the Board.
3) Independent review of the system of internal control by the internal audit department.
4) review of internal audit findings and the adoption of the recommendations put forth by the internal audit department where appropriate.
5) regular review and update of internal policies and procedures to adapt to changing risks or resolve operational deficiencies.
CONCLUSION
the Board is of the view that the system of internal control that has been put in place throughout the Group is sound and sufficient. notwithstanding this, control procedures are continuously being carried out to ensure that the system of internal control remains adequate and effective.
this statement is made in accordance with a resolution of the Board dated 29 September 2008.