Datasonic Group Berhad Annual Report 2019

INTRODUCTION The Board of Directors (“the Board”) of Datasonic Group Berhad (“the Group”) is pleased to present the Statement on RiskManagement and Internal Control of theGroupwhich outlines themain features of theGroup’s riskmanagement and internal control system for the financial year ended 31 March 2019 pursuant to Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR of Bursa Malaysia”), Malaysian Code of Corporate Governance (“MCCG 2017”) and the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“Guidelines”). As Datasonic Group Berhad (“the Group”) operates in a dynamic and cyclical business environment in which risk management and internal control system must be responsive to support its business objectives, the Board and Management uphold their ongoing commitment toembedand improve the riskmanagement and internal control system into the culture, processes and structure of the Group. The efforts continued to evolve on a progressive basis for the financial year ended 31March 2019 and up to date of approval of this Statement for inclusion into the Annual Report. ROLES AND RESPONSIBILITIES Board of Directors The Board recognises the importance of sound risk management and internal control system to ensure the reliability and integrity of financial andoperational information, effectiveness and efficiency of operations, safeguarding of assets and compliancewith laws, regulations, policies, procedures and contracts. Hence, theBoardwith the assurance fromthe Executive Directors andManagement affirms its overall responsibilities for the Group’s riskmanagement and internal control system. These responsibilities are delegated to the Audit Committee and RiskManagement Committee which are empowered by their respective terms of reference to provide oversight and perform regular reviews on the risk management and internal control systems for continuous improvement thereof. TheBoard acknowledges the limitations that are inherent in any riskmanagement and internal control system. As such the systems designed are meant to manage and minimise the extent and severity of the risks, rather than completely eliminate the risks of failureof achieving theGroup’s objectives and strategies. Consequently, theBoard recognises that a sound internal control systemprovides reasonable but not absolute assurance that the Groupwill not be hindered in achieving its business objectives in the ordinary course of business. Executive Directors and Management Executive Directors and Management are accountable to the Board and responsible for implementing the processes of identifying, evaluating, monitoring and reporting of risks and the effectiveness of internal control systems, taking appropriate and timely corrective actions as required. The Executive Directors and Management have assured the Board that the Group’s risk management and internal control systems are operating adequately and effectively in all material aspects, based on the risk management framework and internal control systems adopted by the Group. Internal Audit Department The internal audit function plays a role to provide some comfort to the Board on the adequacy and effectiveness of the risk management practices of the Group by adopting a risk-based approach and focusing on the key risks areas to determine the auditees and auditable areas. During the financial year ended 31 March 2019, the adequacy and effectiveness of internal controls were reviewed by the Audit Committee in relation to the internal audits conducted by the Internal Audit Department (“IAD”) according to the approved audit plan. Audit issues and actions taken by the Management to address the shortcomings raised by the IAD were deliberated and accepted at the Audit Committee meetings. Additionally, the Audit Committee also reviewed the implementation progress of the corrective action plans committed by the Management for all key findings and recommendations highlighted in the previous Internal Audit Reports to ensure all the corrective actionswere implemented appropriately. Minutes of the Audit Committee meetings which recorded these deliberations and decisions were subsequently presented to the Board for notation. A description of IAD’s activities for the financial year ended 31 March 2019 are available in the Audit Committee Report included in this Annual Report. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL 76 DATASONIC GROUP BERHAD (Company No. 809759-X) ANNUAL REPORT 2019