Frontken Corporation Berhad 200401012517 (651020-T) • A N N U A L R E P O R T 2 0 2 1 50 CORPORATE GOVERNANCE OVERVIEW STATEMENT (CONT’D) PRINCIPLE B – EFFECTVE AUDIT AND RISK MANAGEMENT I. AUDIT COMMITTEE To assist in the discharge of its duties on financial reporting, the Board has established an Audit Committee, comprising three (3) Non-Executive Directors, with Dato’ Haji Johar Bin Murat @ Murad, an Independent NonExecutive Director, as the Committee Chairman, until his resignation of a member of the Audit Committee on 1 December 2021. Ng Chee Whye, was subsequently appointed the Chairman of the Audit Committee on 25 February 2022. The Committee’s composition, including its roles and responsibilities as well as a summary of its activities carried out during the financial year under review, are set out in the Audit Committee Report on pages 58 to 61 of this Annual Report. One of the key responsibilities of the Audit Committee is to ensure that the financial statements of the Group and Company comply with Malaysian Financial Reporting Standards, International Financial Reporting Standards and provisions of the Companies Act 2016. Such financial statements comprise the quarterly financial report announced to Bursa Securities and the annual statutory financial statements. The Board understands its role in upholding the integrity of financial reporting by the Company. Accordingly, the Audit Committee, which assists the Board in this aspect, has adopted a policy for the types of non-audit services permitted to be provided by the external auditors and/or their affiliates, including the need for obtaining the Audit Committee’s approval for such services. To enhance transparency and governance, the Audit Committee has also formalised the Policies And Procedures To Assess The Suitability, Objectivity And Independence Of External Auditors that requires a former audit partner to observe a cooling-off period of at least three (3) years if this person is sought to be appointed as an Audit Committee member. This applies to all partners of the external audit firm and/or its affiliate firm. The cooling off period safeguards the independence of the audit by avoiding the potential threats which may arise when a former partner of the external audit firm is in position to exert significant influence over the audit and preparation of the Company’s financial statements. II. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK The Board has overall responsibility for maintaining a sound system of risk management and internal control of the Group that provides reasonable assurance on efficient business operations, compliance with laws and regulations as well as internal procedures and guidelines to achieve corporate objectives. The Audit Committee assists the Board in reviewing the adequacy and operating effectiveness of the system of risk management and internal control in the Group. The Audit Committee does this by deploying an independent outsourced internal audit function as well as an in-house internal audit function that conduct internal audit, with findings presented to the Audit Committee, including the remedial measures and action plans agreed by Management to address the matters so highlighted. For more details of Internal Audit, both for the outsourced and in-house functions, refer to the Statement on Risk Management and Internal Control which is included in the Company’s 2021 Annual Report as well as the Corporate Governance Report that is made available on the Company’s website at www.frontken.com. The Audit Committee is responsible for overseeing the risk management framework and policies while Management of the respective business units and subsidiaries is tasked to manage business risks, including developing, implementing and monitoring mitigating measures to manage such risks to acceptable levels. Details of the Group’s Risk Management framework, activities carried out for the financial year under review and reporting processes are set out in the Statement on Risk Management and Internal Control included in this Annual Report.
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