Excel Force MSC Berhad Annual Report 2016

EXCEL FORCE MSC BERHAD ANNUAL REPORT 2016 25 statement of Corporate Governance (cont’d) The Board is satisfied that in preparing the financial statements of the Company and the Group for the financial year ended 31 December 2016, the Company and the Group have used appropriate accounting policies and applied them consistently and prudently. The Board is of the opinion that the financial statements are prepared in accordance with all relevant approved accounting standards and have been prepared on a going concern basis. Relationship with Auditors The appointment of the auditors is subject to approval at the general meeting. In making its recommendations to the shareholders on the appointment and re-appointment of auditors, the Board relies on the review and recommendation of the Audit Committee. The Board has established a formal and transparent arrangement with its external auditors to meet their professional requirements. The Audit Committee meets with the external auditors to review the rationale of significant judgement, accounting principles and the operating effectiveness of internal controls and business risk management. The auditors have continued to highlight to the Audit Committee and the Board matters that require the Board’s attention. PRINCIPLE 6 – RECOGNISE AND MANAGE RISKS OF THE GROUP The Group has an Internal Audit Function that is independent of its activities and operations. Further details of the activities of the Internal Audit Function are set out in the Statement on Risk Management and Internal Control of this Annual Report. The Board emphasizes on the adequate internal control system, and take effective approaches to supervise the implementation of related control measures, whilst enhancing operation efficiency and effectiveness, and improving corporate governance, risk assessment, risk management and internal control so as to protect the shareholders’ investment and the safety of the Company’s assets. While continuing to improve the internal control related policies, the Company has also been strengthening its IT internal control capabilities, which has improved the efficiency and effectiveness of internal control, enhancing the safety of the Company’s information system so that the integrity, timeliness and reliability of data and information are maintained. Our internal auditors, reporting to the Audit Committee are responsible for assessing the Group’s risk management and internal control systems, formulating an impartial opinion on the effectiveness and efficiency of the systems, and reporting their finding to the Audit Committee. Follow-up audit will be conducted in due course to ensure that the audit recommendations are being properly implemented. The internal audit function covers all material controls including financial, operational and risk management functions. The internal audit findings are reported to the Audit Committee every quarter and the corrective actions are taken by the relevant departments. Based on the assessment for the financial year ended 31 December 2016, the Board and the Audit Committee believe that the system of internal control provide reasonable assurance that the Group’s assets are safeguarded and there is no significant area of concerns that may affect the shareholders. Besides, in order to further establish and continue development of key policies and procedures pertaining to the system of internal control, the Board and the Audit Committee work closely with the internal and external auditors to review and improve the system of internal control from time to time with the objective to safeguard the assets of the Company and the Group and to ensure proper accountability at all levels of operations. The Statement on Risk Management and Internal Control furnished on pages 32 to 34 of this Annual Report provides an overview on the state of internal controls within the Company. PRINCIPLE 7 – ENSURE TIMELY AND HIGH QUALITY DISCLOSURE The Company is aware that the key element of good corporate governance is the effective communication and dissemination of clear, relevant and comprehensive information which is timely and readily accessible by the Company’s stakeholders.