Annual Report (Complete) - MYCRON Steel Berhad

Statement on Internal Control
(continued)
5. Controls Weaknesses (continued)
Management had taken the following actions to address the issue:
a. A Safety and Security Committee was formed to review the security and safety measures taken to reduce the risk factors,
to assess the adequacy of its monitoring system and evaluating the extent to which the system is operating effectively from
time to time.
b. Internal Control Procedure for Internal Security is being adopted with the objective of establishing a documented and
controlled system to ensure that all the Security and Safety matters are at its best possible implementation.
During the financial year under review, the internal auditors carried out reviews on the following core areas to assess the adequacy
and effectiveness of internal controls, compliance with regulations and the Group’s policies and procedures by the subsidiaries:
a. Revenue cycle, purchasing cycle and inventory management and control of Mycron Steel CRC Sdn (“MSCRC”), a wholly
owned subsidiary of the Company;
b. Production operation and quality control and assurance for MSCRC;
c. Maintenance management and property, plant and equipment management for MSCRC; and
d. Sales and deliveries and collection and credit control of MSCRC.
Based on the internal auditors’ report, there is a reasonable assurance that the Group’s systems of internal control are generally
adequate and appear to be working satisfactorily.
6. Review of Effectiveness
The Board is of the opinion that the Group’s present system of internal control is satisfactory and sufficient to support all types of
business and operations within the Mycron Group of Companies.
7. Review of the Statement by External Auditors
As required by Paragraph 15.23 of the Main Market Listing Requirements of Bursa Securities, the external auditors have reviewed
this Statement on Internal Control for the inclusion in the Annual Report for the financial year ended 30 June 2010. Their review was
performed in accordance with Recommended Practise Guide 5: Guidance for Auditors on the Review of Directors’ Statement
on Internal Control issued by the Malaysian Institute of Accountants. Based on their review, the external auditors have reported
to the Board that nothing have come to their attention that causes them to believe that this Statement is inconsistent with their
understanding of the process the Board has adopted in the review of the adequacy and integrity of internal controls of the
Group.
pg 37 | Mycron Steel Berhad