ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 22 CORPORATE GOVERNANCE OVERVIEW STATEMENT PRINCIPLE B – EFFECTIVE AUDIT AND RISK MANAGEMENT I. Audit and Risk Management Committee The Board has established an ARMC to provide robust and comprehensive oversight on the financial reporting matters as well as the external and internal audit processes. The ARMC comprises four members, all of whom are Independent Non-Executive Directors. The Chairman of the ARMC is the Senior Independent Non-Executive Director who is not the Chairman of the Board. The Board upholds the integrity of financial reporting by the Company. As such, it has established procedures, via the ARMC, in assessing the suitability and independence of the external auditors. Such procedures entail the provision of written assurance by the external auditors, confirming that they are, and have been, independent throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants. The ARMC has met with the external auditors without the presence of the Executive Directors and Management twice during the financial year ended 31 March 2020. The ARMC is satisfied in its review that the provision of non-audit services by Messrs BDO PLT as external auditors to the Group for the financial year ended 31 March 2020 did not in any way impair their objectivity and independence as external auditors of the Company. On an annual basis, the ARMC would review and monitor the suitability and independence of the external auditors. The ARMC is satisfied with the competence and independence of the external auditors and had recommended the re-appointment of Messrs BDO PLT as external auditors for shareholders’ approval at the 28 th Annual General Meeting. II. Risk Management and Internal Control Framework The Board is ultimately responsible for the establishment of a sound framework to manage risks. The President & Group Chief Executive Officer oversees these risk management processes and activities and reports to the Board. The Management assists the Board in the implementation of the Board’s policies and procedures on risk management and internal control. The Board acknowledges its responsibility for the Group’s systems of internal control and risk management and for reviewing the effectiveness of those systems. Such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives. Any system can only provide a reasonable but not absolute assurance against material misstatement, loss or fraud. The Statement on Risk Management and Internal Control as set out on pages 48 to 53 in this Annual Report provides an overview of the management of risks and state of internal controls within the Group. The Company has in its employment, an internal auditor (“Internal Auditor”) who reports directly to the Chairman of the ARMC. The internal audit reviews the controls and processes of the organisation in accordance with the approved audit plan which adopts a risk-based approach towards planning and audit execution. The scope of work covered by the internal audit function during the financial year is set out on pages 46 and 47 of this Annual Report.