2004 - Hiap Teck Venture Berhad

STATEMENT ON
INTERNAL CONTROL
The Board of Directors of Hiap Teck Venture Berhad
acknowledges the importance of the systems of internal
control and affirms that it is their responsibility to
maintain a sound system of internal control including
review of its adequacy and integrity in order to safeguard
the shareholders’ investment and the Group’s assets. In
this respect, the Board assumes its responsibility for
identifying principal risks, ensuring the implementation of
appropriate systems to manage these risks and reviewing
the adequacy and integrity of the Group’s internal control
system. However, it should be noted that such system of
internal control is designed to manage rather than
eliminate the risk of failure to achieve business
objectives. Therefore these systems can only provide
reasonable but not absolute assurance against material
misstatements or losses.
The following summarises the processes used by the
Board on its reviews of system of internal controls.
These processes were carried out on an on-going basis
and were accorded with the Guidance on Statement on
Internal Control.
The process of identifying, evaluating and managing
significant risks faced by the Group was dealt with as
part of the operation management. Meetings are held
regularly at the management level to monitor changes in
the business environment and their impact on the
operations. Significant corporate matters are brought to
the attention of the Board for further deliberation to
ensure that risks are appropriately considered and
reasonably addressed. At this level, business strategies
are considered by the Board to ensure that strategies are
in-line with the corporate objective and direction.
In order to assist the Board in reviewing the internal
control system of the Group, the Audit Committee is
tasked with the review of compliance, control and audit
issues with the assistance of statutory and internal
Auditors. Issues and findings are then reported by the
Audit Committee to the Board. Annual budget is also
used as a yardstick of measurement of the Group
performance and risks are insured when appropriate to
mitigate financial exposures to the Group.
To further strengthen the current risk management
practices in the Group, Internal Auditor was tasked to
facilitate the management in risk documentation
exercise. This risk documentation exercise aims to
supplement management risk awareness and to provide
inputs for the risks discussion at the management level.
In addition, to ensure the quality control of services and
production, the management has successfully initiated
an ISO program during the financial year for one of its
major production plants in the Group.
Other key control practices in the Group include
definition of management reporting structure,
segregation of duties and generation of financial
information for Audit Committee’s review and Board
approval.
12 HIAP TECK VENTURE BERHAD