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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
Principle 6 – Recognise and manage risks
6.1 The Board should establish a sound framework to manage risks
The Board had established an Enterprise Risk Management framework to identify, evaluate, control, report and monitor
significant risks faced by the Group. Such a framework also includes pertinent risk management policies and guidelines
to provide structured guidance to personnel across the Group in addressing risk management. The risk appetite of the
Group is articulated via the use of risk parameters in the framework, covering financial and non-financial metrics, to
assess the likelihood of risks occurring and the impact thereof should the risks crystallise. Internal controls deployed by
Management are linked to, and mitigate, the business risks identified.
The Audit Committee works with the Internal Auditors to ensure that the Internal Audit Annual Plan encompasses the
audit of areas with higher vulnerability. The Internal Auditors are also required to perform periodic testing of the internal
control system to ensure that the system is robust, including follow-up on the status of Management’s implementation
of action plans to address issues raised by the Internal Auditors.
Further details of the Enterprise Risk Management framework and the system of internal control of the Group are set
out in the Statement on Risk Management and Internal Control in this Annual Report.
6.2 The Board should establish an internal audit function which reports directly to Audit Committee
During the financial year under review, the Company outsourced its internal audit function to an independent professional
firm, namely BDO Governance Advisory Sdn Bhd in place of the outgoing service provider, i.e. KPMG Management &
Risk Consulting Sdn Bhd, with the objective of conducting systematic testing and assessment of the Group’s internal
control system based on an internal audit plan approved by the Audit Committee. Its responsibilities included providing
independent and objective reports on the state of internal control of the significant operating units in the Group to the
Audit Committee, with recommendations for improvement to the control procedures, so that remedial actions can be
taken in relation to weaknesses noted in the system. Further details of the activities carried out by the internal audit
function are set out in the Statement on Risk Management and Internal Control included in this Annual Report.
Principle 7 – Ensure timely and high quality disclosure
7.1 The Board should ensure the Company has appropriate disclosure policies and procedures
The Board has established an internal Corporate Disclosure Policy in compliance with the disclosure requirements as
set out in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
The Board delegated the authority to the Chairman of the Company to ensure that the Corporate Disclosure Policy is
adhered to by Senior Management and the Company Secretaries with respect to disclosure obligations.
7.2 The Board should encourage the Company to leverage on information technology for effective dissemination of information
The Company’s website has a section dedicated to shareholders under Investor Relations where shareholders can
check on the latest announcements of the Company, press release, media news, share and warrant prices and also to
contact the designated person on investor relations matters. The shareholders are also encouraged to subscribe for
any news alert of the Company.
Principle 8 – Strengthen relationship between Company and shareholders
8.1 The Board should take reasonable steps to encourage shareholder participation at general meetings
The Board encourages the attendance of shareholders at the Company’s Annual General Meeting. The notice period
of the Annual General Meeting is given to the shareholders slightly longer than the minimum of 21 clear days. With a
slightly longer time, the shareholders are provided with ample time to review the annual report, to appoint proxies and
to collate questions to be asked at the Annual General Meeting.
Corporate Governance
Statement
(cont’d)