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ANNUAL REPORT 2016
Report of the Audit & Risk Management Committee
RMS adopts a risk-based methodology in its work and undertakes regular risk and vulnerability assessment on the business units (operational and
non-operational) within the Group, highlights significant weaknesses and makes appropriate recommendations for improvement to ensure proper,
economic and effective use of resources of the Group.
The internal audit plan 2015/2016 was reviewed and approved by the ARC and endorsed by the Board in May 2015. Subsequently, 4 audit
visits to the targeted business units that represented the key risk areas were carried out. During the audit visits, the representatives of the Internal
Auditors had tested the efficiency and effectiveness of the risk management and internal control system of those business units, benchmarked
them against the industry practices and suggested appropriate processes and procedures to mitigate the control deficiencies. The relevant findings,
management’s response and/or recommendations were reported to the ARC, and thereafter to the Board in their quarterly meetings held. The fee
incurred for the FY2016 in relation to the internal audit function is RM126,368.00.
THE EXTERNAL AUDITORS
The ARC places great importance on the quality and effectiveness of the audit services of the External Auditors and considers the appointment or
re-appointment (as the case may be) of the External Auditors annually.
The following areas are essential upon evaluating the performance of the External Auditors for the FY2016:
Independence and objectivity
The ARC received a written assurance from the External Auditors confirming that they are, and have been,
independent throughout the conduct of the audit engagement in accordance with the terms of all relevant
professional and regulatory requirements.
The External Auditors also informed the ARC that:
M/s BDO is seeking for its re-appointment at the forthcoming 25th AGM of the Company; and
the Lead Audit Partner, Law Kian Huat who is responsible for the Group’s audit for 5 years (including
FY2016), is subject to rotation, and a new audit partner will assume the role should M/s BDO be
re-appointed External Auditors of the Company.
Effectiveness
The ARC met with the Executive Directors and management to obtain their feedback pertaining to the
effectiveness of the External Auditors, judging from the thoroughness of their audit approach and methodology,
the competency, experience and integrity of their key personnel, and the quality of the audit delivery.
Audit and Non-Audit Fees
In relation to the audit services provided for the FY2016, the shareholders of the Company have granted their
approvals for the Board to determine the remuneration of the External Auditors at the Company’s 24th AGM held
on 25 November 2015.
During the FY2016, the External Auditors also rendered non-audit services to the Group included the review of
Company’s disclosure on realised and unrealised profit, Statement on Risk Management & Internal Control and
subsidiary’s gross sales statements to landlords.
After due consideration, both the ARC and the Board were of the view that the following audit and non-audit fees
incurred for the FY2016 are fair and reasonable, and the provision of non-audit services to the Group did not
impair, or was not perceived to impair the independence and objectivity of the External Auditors.
Fee incurred
Audit Fee (RM’000)
Non-Audit Fee (RM’000)
The Company
53
15
The Group
876
44
