Frontken Berhad Annual Report 2018

31 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2018 Statement On Risk Management And Internal Control PURPOSE OF STATEMENT Paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) stipulates that a listed issuer must ensure that its board of directors makes a statement (“Statement on Risk Management and Internal Control” or “Statement”) about the state of risk management and internal control of the listed issuer as a group. =QN <]J]NVNW] WNNM\ ]X RWLU^MN \^O࠰LRNW] JWM VNJWRWPO^U RWOX[VJ]RXW [NZ^R[NM Kb \QJ[NQXUMN[\ JWM X]QN[ \]JTNQXUMN[\ ]X make an informed assessment of the main features and adequacy of the listed issuer’s risk management and internal control system as a group. Accordingly, the Board of Directors (“Board”) of Frontken Corporation Berhad (“Company”) furnishes this Statement, which outlines the nature and scope of the system of risk management and internal control in the Group (comprising the Company JWM R]\ \^K\RMRJ[RN\ OX[ ]QN ࠰WJWLRJU bNJ[ NWMNM -NLNVKN[ ! JWM ^Y ]X ]QN MJ]N XO JYY[X_JU XO ]QR\ <]J]NVNW] for inclusion in the Company’s Annual Report. For the purpose of disclosure, this Statement has considered and, where pertinent, included the mandatory contents outlined in the “Statement on Risk Management and Internal Control - Guidelines for Directors of Listed Issuers”, a publication of Bursa Securities, which provides guidance to listed issuers in preparing the Statement. BOARD’S RESPONSIBILITY ON RISK MANAGEMENT AND INTERNAL CONTROL The Board acknowledges and assumes its overall responsibility for the Group’s system of risk management and internal control to safeguard shareholders’ investment and the Group’s assets as well as reviewing the adequacy and operating effectiveness of this system in meeting the Group’s business objectives. The Board is mindful of the need to establish LUNJ[ [XUN\ JWM [N\YXW\RKRUR]RN\ RW MR\LQJ[PRWP R]\ ࠰M^LRJ[b JWM UNJMN[\QRY O^WL]RXW\ RW URWN `R]Q ]QN 9[RWLRYUN\ 9[JL]RLN\ and Guidance of the Malaysian Code on Corporate Governance (“MCCG”). As such, the Board is aware of its principal responsibilities, as outlined in the following Practices and Guidance of the MCCG, pertaining to risk management and internal control: ۽ 9[JL]RLN JWM 0^RMJWLN The Board should: - ensure a sound framework for internal controls and risk management; - understand the principal risks of the Company’s businesses and recognise that business decisions involve the taking of appropriate risks; - set the risk appetite within which the Board expects Management to operate and ensure that there is an appropriate [R\T VJWJPNVNW] O[JVN`X[T ]X RMNW]ROb JWJUb\N N_JU^J]N VJWJPN JWM VXWR]X[ \RPWR࠰LJW] ࠰WJWLRJU JWM WXW ࠰WJWLRJU [R\T\$ ۽ 9[JL]RLN " The Board should establish an effective risk management and internal control framework; and ۽ 9[JL]RLN " The Board should disclose the features of its risk management and internal control framework, and the adequacy and effectiveness of this framework. =QN 6,,0 JU\X Y[X_RMN\ ]QJ] ]QN +XJ[M \QX^UM RW R]\ MR\LUX\^[N RWLU^MN J MR\L^\\RXW XW QX` TNb [R\T J[NJ\ \^LQ J\ ࠰WJWLN operations, regulatory compliance, reputation, cyber security and sustainability were evaluated and the controls in place to mitigate or manage those risks. In view of the limitations inherent in any system of risk management and internal control (“System”), the System is designed to manage, rather than eliminate, the risk of failure to achieve the Group’s business and strategic objectives. The System can, QNWLN XWUb Y[X_RMN [NJ\XWJKUN K^] WX] JK\XU^]N J\\^[JWLN JPJRW\] JWb VJ]N[RJU VR\\]J]NVNW] ࠰WJWLRJU UX\\ X[ O[J^M^UNW] activity.