There was no revaluation policy on landed properties adopted by the Company during the financial year ended 31 December 2009.
Statement on Internal Control
This Statement on Internal Control by the Board of Directors (“the Board”) is made pursuant to the Listing Requirements of Bursa Malaysia on the Group’s compliance with the Principle and Best Practices for the state of internal control as provided in the Malaysian Code on Corporate Governance.
Board Responsibilities
The Board of Sarawak Plantation Berhad acknowledges its responsibility towards the Group to maintain a sound system of internal control to safeguard shareholders’ investment and the Group’s assets as well as reviewing the adequacy and effectiveness of the system of internal control. A sound system of internal control includes the establishment of an appropriate control environment and framework, encompassing financial, operational and compliance controls and management of risks throughout its operations.
Due to the limitations inherent in any internal control, such systems are designed to manage and mitigate risks that may impede the Groups’ achievement of its objectives rather than eliminate these risks. Accordingly, the system of internal control can only provide reasonable but not absolute assurance against any material misstatement or loss arising from the possibility of poor judgment in decision making, management overriding controls, loss and the occurrence of unforeseeable circumstances. The concept of reasonable assurance also recognises that the cost of control procedures should not exceed the expected benefits.
Internal Control and Risk Management
The Board regards risk management as an integral part of effective management of the business and operation of the Group which can directly affect its ability to implement its strategy and achieve its mission.
The Risk Management Committee, comprising representatives from the Board and the Management, assists the Board in strengthening and monitoring the risk management practice of the Group. The Group established its Risk Management Policy and Risk Profile in 2008. The Group’s approved Risk Management Policy outlines the policies and procedures for implementing, reviewing, evaluating and monitoring the principal risks of the Group whereas the approved Risk Profile documents the principal risks identified, strategies, controls and management actions in addressing such risks, which includes examining the business operational risks in critical areas, potential impacts and identifying measures and timeframe to mitigate those risks. The Management periodically reviews the measures taken to manage those identified risks. The results of and the recommendations arising from the review are tabled to the Risk Management Committee before the Risk Profile is updated.
Other Key Elements of Internal Control
Other key elements of the Group’s system of internal control include:-
● Defined organisation structure and clearly established responsibilities and delegation of authority for the Management and Board Committees;
Statement on Internal Control
Other Key Elements of Internal Control (continued)
● Management performance reports are prepared for review by the Board on a quarterly basis. Any significant deviation from the budget and parameters set by the Board would be investigated, explained and presented to the Board;
● Regular meetings between Executive Directors and the Management are held to deliberate the Group’s strategies, policies, financial and operational performance and other key issues; and
● Appointment of external experts and professionals on a project basis to review and evaluate the Group’s plantation and mill activities. Their recommendations for improvement are reviewed and acted upon by the Management.
Internal Audit
The Internal Audit Department reports directly to the Audit Committee on a quarterly basis, the results of works carried out in accordance with the Internal Audit Plan approved by the Audit Committee. The internal audit function performs periodic reviews on critical business processes to identify any significant risks, assesses the effectiveness and adequacy of the system of internal control and where necessary, recommends areas for improvement.
The Audit Committee, on behalf of the Board, receives reports from both internal and external auditors. The Audit Committee regularly reviews the reports and holds discussions with the Management on the actions taken on identified internal control issues.
Weaknesses in Internal Control
There were no major internal control weaknesses identified during the year, nor have any of the reported weaknesses resulted in material losses or contingencies requiring disclosure in the Group’s Annual Report.
Those areas which require improvement, as highlighted by the internal and external auditors have been, or are being addressed.
The Board confirms that its system of internal control was operational throughout the year and up to the date of approval of the Annual Report. In addition, the Board remains committed towards operating a sound system of internal control and therefore recognises that the system must continuously evolve to support the type of business and size of operations of the Group. As such, the Board, in striving for continuous improvement, will put in place proper action plans, when necessary, to further enhance the Group’s system of internal control.
The Group’s system of internal control applies to the Company and its subsidiaries only and does not cover its associated companies.