In carrying out its activities, Harum Energy encounters a variety of risks in its business environment and operational activities. Thus, reliable risk management system is necessary to mitigate and managing such risks. As an integral part of the Company’s policies, the management regularly identifies, reviews, and prioritizes the handling of such risks. The development and implementation of a risk management is carried out meticulously, comprehensively, and with a priority on risks that may affect the Company’s performance materially.
Evaluation of Risk Management System Effectiveness
The Company evaluates the system's effectiveness in a continuous manner, assisted by the Company's Internal Audit Unit. Enhancements to the internal control system are carried out continuously by taking into consideration its objectives, policies, scale and complexity.
The main principles which underlie the evaluation of the Company's risk management system, among others, are:
- Ensuring that there is a clearly defined line of reporting and a distinct segregation of functions between operational work units and the work units with controlling responsibilities.
- Ensuring that work systems and procedures have been developed with due consideration to the aspects of operations and business, as well as the level of risk that may exist in the respective work units.
- Managing information system so that it provides accurate and timely information and analysis to the management, in order to anticipate and deal with changes in market conditions.
- Ensuring that the Internal Audit Division has regularly performed independent and objective reviews on the procedures and operations of the Company. The Internal Audit Division submits its reviews to the Board of Directors in the form of an Audit Results Report.