Frontken Corporation Berhad 200401012517 (651020-T) • A N N U A L R E P O R T 2 0 2 1 57 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D) INTERNAL AUDIT FUNCTION – ITS COMPOSITION AND SCOPE OF COVERAGE (CONT’D) External Auditors The external auditors, in the course of their statutory audit of the Group’s financial statements, reviewed the Group’s system of internal control to the extent of their planned reliance as laid out in their audit planning memorandum. Any significant deficiencies in internal controls identified during the audit, together with the improvement measures to strengthen internal controls, were reported in writing to the Audit Committee by the external auditors vide their presentation deck. In assisting the Board to assess the adequacy and operating effectiveness of the Group’s risk management and internal control system, the Audit Committee reviewed the observations raised by the internal and external auditors, as well as actions taken by Management to address the areas of concern for the financial year ended 31 December 2021. The Audit Committee reported to the Board the outcome of its engagement with the internal and external auditors concerning the adequacy and operating effectiveness of the Group’s system of risk management and internal control. BOARD’S COMMENTS ON THE ADEQUACY AND OPERATING EFFECTIVENESS OF THE GROUP’S RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM The Board, assisted by its Audit Committee, has reviewed the adequacy and operating effectiveness of the Group’s risk management and internal control system, and that relevant actions have been or were being taken, as the case may be, to remedy the internal control weaknesses identified from the review. The Board is of the view that the system of risk management and internal control, in place for the financial year under review and up to the date of approval of this Statement for inclusion in the Annual Report of the Company, is sound and sufficient to safeguard the interest of shareholders, customers, employees and the Group’s assets. Whilst the Board is of the view that there were no material losses incurred during the financial year as a result of weaknesses in the risk management and internal control system, the Board believes that this system must continuously evolve to meet the changing business landscape and environment the Group operates in. Therefore, the Board continues to put in place action plans, as deemed appropriate, to strengthen the system of risk management and internal control from time to time towards achieving the Group’s corporate objectives. ASSURANCE BY THE GROUP CHIEF EXECUTIVE OFFICER AND GROUP CHIEF FINANCIAL OFFICER ON THE ADEQUACY AND OPERATING EFFECTIVENESS OF THE RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM The Board has received assurance in writing from the Group Chief Executive Officer and Group Chief Financial Officer stating that the Group’s risk management and internal control system operated adequately and effectively, in all material aspects, for the financial year under review and up to the date of this Statement. REVIEW OF STATEMENT BY THE EXTERNAL AUDITORS Pursuant to Paragraph 15.23 of Bursa Securities’ Main Market Listing Requirements, the external auditors have reviewed this Statement for inclusion in the Company’s Annual Report for the financial year ended 31 December 2021. The external auditors have reported to the Board that, based on their review procedures performed and evidence obtained, nothing has come to their attention that caused them to believe that this Statement intended to be included in the Annual Report is not prepared, in all material respects, in accordance with the disclosures required by Paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issues to be set out, nor is the Statement factually inaccurate. This Statement is made in accordance with the resolution of the Board of Directors dated 22 March 2022.
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