cover rationale - ChartNexus

Risk Management Framework
The Group has in place an on-going process for identifying, evaluating, monitoring and
managing the significant risks affecting the achievement of its business objectives.
The Board has established an organization structure with clearly defined lines of accountability
and delegated authority. It has extended the responsibilities of the Audit Committee to include
the work of monitoring all internal controls, on its behalf.
In a move towards a more integrated approach to risk management, the Board is in the
process of establishing a Risk Management Committee. The Risk Management Committee will
be chaired by the Chief Executive Officer and will include the Executive Director, Head of
Group Financial Operations, Head of Projects and Corporate Planning, Head of Human
Resources and Head of Corporate Governance with representatives from each operating unit
attending, as required. The Risk Management Committee will meet on a regular basis to
review and consider what changes to risk management and control processes should be
recommended. Its review will cover matters such as responses to significant risks identified,
output from monitoring processes and changes made to the internal control systems. It will
report to the Audit Committee which also oversees the function of the Risk Management
Committee. The Audit Committee will then report to the Board significant changes in the
business and the external environment which affect key risks.
As part of the risk management process various ad hoc committees are set up to address
significant issues as and when necessary.
Other Key Elements
The Board has also established the Tender Committee to ensure transparency and integrity of
the award process.
The other key elements of the Group’s internal control systems are described below:
• clearly defined lines of authority and divisionalised organization structure for monitoring
the conduct and operations of individual business units
• clear delegation of responsibilities to committees of the full Board and to operating units,
including authorization levels for all aspects of the business set out in the authority
manual
• clearly documented internal policies and procedures set out in a series of Standard
Operating Manuals which is currently being reviewed for improvement to reflect changes
in business structures and processes
• a detailed budgeting process where operating units prepare budgets for the coming year
which are approved both at operating unit level and by the full Board
• monthly reporting of actual results and review against budget, with major variances being
followed up and management action taken, where necessary
• monthly status report on division and department activities submitted to Performance
Monitoring And Risk Management Department to be reviewed and discussed
• monitoring of performance including discussion of any significant issues at monthly
division meeting and senior management meeting chaired by the Chief Executive Officer
Laporan Tahunan 2002 Annual Report
STATEMENT OF CORPORATE GOVERNANCE (CONTINUED)
39