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ANNUAL REPORT 2016
Risk management and
internal control
The ARC assessed the risk profile, risk appetite, levels of tolerance of the Group, challenged and tested on
the adequacy and integrity of the internal control system in place to manage the selected areas representing
significant risks, considered the findings and recommendations made by the Internal and External Auditors and
management’s response or actions to mitigate control deficiencies, and concluded that the risk management and
internal control system of the Group is continuously being enhanced to safeguard the shareholders’ investments
and the Group’s assets.
Internal audit
The ARC assessed the internal audit plan, audit methodology, remuneration, scope of works and reports
presented by the Internal Auditors, considered the management’s response and follow up actions thereto so to
ensure significant findings are adequately addressed by the management; and concluded that the internal audit
processes duly completed by the Internal Auditors in FY2016 were adequate to add value and to improve the
efficiency of the operations of the Group.
External audit
Prior to the commencement of the annual audit, the ARC reviewed the audit plan, audit strategy, scope of work,
independence, objectivity and remuneration proposed by the External Auditors, discussed with the External
Auditors the audit findings, their audit reports and management letters and management’s response to the
concerns raised by the External Auditors during their course of audit and concluded that the audit processes
carried out by the External Auditors were comprehensive and added credibility to the Company’s financial
statements which allowed the stakeholders of the Group to use them with greater confidence.
Related party transactions,
and conflict of interest
In accordance with the threshold and provisions specified in Chapter 10 of the Main Market Listing Requirements
of Bursa Malaysia Securities Berhad (“BMSB”), and the methods and procedures to govern the requirements
of related party transactions (“RPT”) and recurrent related party transactions (“RRPT”) duly established by the
Company, the ARC identified, tracked and monitored the potential and existing RPT and RRPT of the Group with
due consideration being given to the nature and class of such transactions that are supposed to be consistent
with the ordinary course of the Group’s business, which are undertaken on an arm’s length basis at the prevailing
prices or market rates and are based on usual and fair commercial terms not more favorable to related parties
than those generally available to the public, or otherwise in accordance with the applicable industry norms.
Where there is no market value for a particular transaction, the transaction will be on a willing buyer willing
seller basis or the nearest equivalent. These transactions are also not prejudicial to the interest of the shareholders
of the Company and not detrimental to its minority shareholders. The ARC also reviewed the appropriateness of
the relevant announcements to BMSB, circular to shareholders and disclosure made in the annual report of the
Company.
After making all the necessary enquiries to the management and Directors of the Company, the ARC reported to
the Board that they have no knowledge of the existence of any conflict of interest within the Group during the
FY2016.
THE INTERNAL AUDIT FUNCTION
The Group has outsourced its internal audit function to M/s RMS Corporate Management Sdn Bhd (“RMS”), a professional firm that has adequate
resources and appropriate standing to undertake its activities independently and objectively to provide reasonable assurance to the ARC regarding
the adequacy and effectiveness of risk management, internal control and governance systems. The Internal Auditors report directly to the ARC.
Report of the Audit & Risk Management Committee
