(i) Financial Reporting
The Board aims to convey a balanced and understandable assessment of the Group’s performance and prospects in its quarterly announcements, annual reports and other public reports to the shareholders. The Board retains the responsibility for the preparation of the Group’s and Company’s financial statements. The Directors are required by the Companies Act 2016 to prepare the Group’s and the Company’s statutory financial statements with all material disclosures, to ensure the accuracy and completeness, in compliance with MASB approved accounting standards in Malaysia for entities other than Private Entities, as well as the rules and regulations under the said Act. In order to properly achieve this, the ARMC assists the Board in over seeing the Group’s financial reporting process and the quality of its financial reporting.
The Statement by Directors pursuant to Section 251(2) of the Companies Act 2016, in relation to the preparation of the financial statements is set out on page 168 of the Annual Report.
(ii) Risk Management and Internal Controls
The Board continues to maintain and review its risk management process and internal control procedures to ensure a sound system of risk management and internal control to safeguard shareholder’s investments and the assets of the Company and the Group.
In discharging its duties in ensuring the effectiveness of the Group’s systems of risk management and internal control, the Board has entrusted this responsibility to the ARMC. The scope and results of the ARMC’s review are detailed in the Internal Control Statement as set out on pages 84 to 89 of the Annual Report.
(iii) Relationship with Auditors
The Board, through the ARMC, has a professional and transparent relationship with both the Group’s internal and external auditors.
The internal auditors report directly to the ARMC and has unrestricted access to the ARMC. The internal auditors are tasked to independently review the effectiveness of the risk management process and internal controls of the Group.
The ARMC has appointed an Outsourced Professional Internal Audit firm. The Internal Audit firm conducts regular reviews on the Business Unit operations based on an annually approved Internal Audit Plan. Ad-hoc audits are also commissioned by the ARMC as and when necessary.
The objective of the Internal Audit function is to provide a disciplined approach to evaluate and improve the effectiveness of risk management, internal controls and governance processes and serves as source of independent advice to the ARMC on the state of the internal controls and the results of the risk mitigating strategies and to recommend appropriate improvements.
The internal auditors attend the ARMC meeting quarterly to present their audit observations, recommendations and report on the status of corrective actions implemented by Management. The minutes of the ARMC meetings are tabled to the Board for information and serve as useful references, particularly if there are pertinent issues that any Directors wish to highlight or seek clarification on.
The ARMC and the Board place great emphasis on the objectivity and independence of external auditors in providing relevant and transparent reports to the shareholders. The ARMC undertakes an assessment on the independence of the external auditors annually.
The Board has obtained assurance from the external auditors on their independence in discharging their duties throughout the conduct of the audit engagement.
The external auditors attend the ARMC meeting twice during the financial year to discuss their audit plans, fees, audit findings and their review of the Company and the Group financial statements.
Disclosure of non-audit fees is included under Additional Compliance Information as set out on page 175 of the Annual Report.
Other facets of the relationship between the ARMC and both the internal and external auditors are elaborated in the Audit and Risk Management Committee Report as set out on pages 84 to 89 of the Annual Report.