perspective perspective - ChartNexus

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The Board considers that the enterprise risk management framework is robust, but will still subject the framework to
continuous improvement, taking into consideration better practices and the changing business environment.
To further promote risk management culture within the Group, a risk management training session involving relevant
executive and management staff was carried out during the financial year to reinforce their understanding of enterprise risk
management in addition to improving risk management knowledge and practices.
INTERNAL AUDIT FUNCTION
The internal audit function of the Group is outsourced to external consultants who report directly to the Audit Committee.
Internal audit evaluates the internal controls within the key activities of the Group’s businesses on the basis of an annual
internal audit plan presented to the Audit Committee for approval. The internal audit function adopts a risk-based approach
and prepares its internal audit strategy and plan based on the risk profiles of the major business units of the Group.
The internal audit reports, including management’s action plans to improve the internal control system, are reviewed by the
Audit Committee. The Audit Committee presents its findings to the Board based on the frequency of internal audit cycles set
out in the internal audit plan.
For further details, please refer to the Audit Committee Report.
OTHER RISK AND CONTROL PROCESSES
The current system of internal control and risk management in the Group has within it, the following elements:
• There is in place an organisational structure with formally defined lines of responsibility and delegation of authority.
• A 5-year business plan outlining strategies towards achievement of corporate and business objectives of the Group, which
provides a basis for monitoring the Group’s business performance.
• Established financial limits of authority, which have been approved by the Executive Committee of the Board, are in place
to ensure proper accountability and delegation of authority.
• A budgetary control system is in place whereby annual budgets are prepared by business units and approved by the Board.
Review of actual performance against budget is regularly carried out, and this review encompasses both financial and nonfinancial
key performance indicators. All major variances are reported to the Board. Appropriate remedial and corrective
actions will be taken by the management to minimise the adverse effect of such variances, where necessary.
• Standard operating procedures in respect of certain operational areas have been established to regulate the day-to-day
operations within the Group. Such standard operating procedures are reviewed from time to time to address changes in
business operating environment.
WEAKNESSES IN INTERNAL CONTROLS THAT RESULT IN MATERIAL LOSSES
There were no material losses incurred during the current financial year as a result of weaknesses in internal control.
Management continues to take measures to strengthen the control environment.
This statement is made in accordance with the resolution of the Board dated 30 March 2006.
UNITED MALAYAN LAND BHD