KPJ Healthcare Berhad - Annual Report 2018

OUR BUSINESS & STRATEGY OUR PERFORMANCE AND OUTLOOK OUR RESULTS OUR GOVERNANCE APPENDICES ABOUT THIS REPORT 133 KPJ HEALTHCARE BERHAD www.kpjhealth.com.my STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (PURSUANT TO PARAGRAPH 15.26 (B) OF THE BURSA MALAYSIA LISTING REQUIREMENTS) BOARD RESPONSIBILITY The Board affirms its overall responsibility for establishing the Group’s system of internal controls and risk management framework as well as reviewing its adequacy, integrity and effectiveness. The Board has put in place a sound governance structure, risk management framework and internal control system pursuant to Principle B (II) of the Malaysian Code on Corporate Governance 2017 to ensure effective oversight of controls and risks in the Group. The Risk & Sustainability Committee (RSC) and the Audit Committee (AC) reviews the adequacy and effectiveness of internal controls system and risk management framework through the internal audits and risk management reviews conducted by the Group Internal Audit Services and Risk & Compliance Services respectively. Issues raised and actions taken by Management to address these issues were deliberated in the RSC and AC meetings and the minutes of the RSC and AC meetings were then presented to the Board. THE BOARD OF DIRECTORS OF KPJ HEALTHCARE BERHAD (KPJ) IS PLEASED TO PROVIDE THE FOLLOWING STATEMENT ON THE STATE OF RISK MANAGEMENT AND INTERNAL CONTROLS OF THE GROUP WHICH HAS BEEN PREPARED IN ACCORDANCE WITH THE STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL – GUIDELINES FOR DIRECTORS OF LISTED ISSUERS ISSUED BY BURSA MALAYSIA SECURITIES BERHAD. MANAGEMENT RESPONSIBILITY The Management is overall responsible for implementing the Board’s policies on risks and controls by allocating resources for the design and implementation of policies and procedures on risk management and internal control system to facilitate the identification and evaluation of significant risks faced by the Group and formulating adequate controls to manage these risks, according to the risk appetite set by the Board. The principal objective of the risk management framework and internal control system is to identify and manage business risks effectively and safeguard assets. As the internal controls system is designed to manage and reduce risks rather than eliminating them, the system can only provide reasonable assurance to the Board regarding the achievement of company objectives through:- • effectiveness and efficiency of operations • reliability of financial reporting • compliance with applicable laws and regulations RISK MANAGEMENT STRUCTURE BOARD OF DIRECTORS AUDIT COMMITTEE AND RISK & SUSTAINABILITY COMMITTEE MANAGEMENT bears overall responsibility for establishing the Group’s system of internal controls and risk management framework as well as reviewing its adequacy, integrity and effectiveness reviews the adequacy and effectiveness of internal controls system and risk management framework through internal audits and risk management reviews conducted by the Group Internal Audit Services and the Risk and Compliance Services respectively. responsible for implementing the Board’s policies on risks and controls by allocating resources for the design and implementation of policies and procedures on risk management and internal control system to facilitate the identification and evaluation of significant risks faced by the Group and formulating adequate controls to manage these risks, according to the risk appetite set by the Board