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Annual Report 2013
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g)
To assess the adequacy and effectiveness of the system of internal control and accounting control procedures of
the Company and Group by reviewing External Auditors’ management letter and management’s response.
h)
To undertake such other responsibilities as may be agreed by the Audit Committee and the Board.
i)
To review and monitor the suitability and independence of external auditors.
j)
To obtain written assurance from the external auditors confirming that they are, and have been, independent
throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and
regulatory requirements.
7.
Review of Composition of Audit Committee
The term of office and performance of the Audit Committee and each of the members shall be reviewed by the Board at
least once every three (3) years to determine whether the Audit Committee and its members have carried out their duties
in accordance with the Terms of Reference.
Summary of Audit Committee Activities during the year ended 31 December 2013
a)
Reviewed the unaudited quarterly financial statement and the audited annual financial statement of the Company and
the Group, prior to recommending the same document for approval by the Board, upon being satisfied that the financial
reporting and disclosure requirements to the relevant authorities had been complied with, before releasing to Bursa
Malaysia Securities Berhad and Securities Commission.
b)
Reviewed with the External Auditors the Audit Plan for 2013.
c)
The Audit Committee sat with the External Auditors without the presence of other Directors and employees to determine
whether there were any significant issues on the findings of their audit and cooperation extended by management.
d)
Reviewed and approved the internal audit plan of the Internal Auditors for 2013, and their quarterly report and findings.
e)
Reviewed Quarterly Related Party Transactions which are required to be transacted at arms length and are not detrimental
to the interests of minority shareholders.
f)
Reviewed the Audit Committee’s Terms of Reference.
g)
Considered and recommended the re-appointment of External Auditors and their fees.
h)
Reviewed Statement on Risk Management & Internal Control.
i)
Reviewed Report of Audit Committee.
Summary of Internal Audit Activities during the year ended 31 December 2013
The Internal Audit Function of the Company is outsourced to an independent professional firm in ensuring an independent, objective
assurance and to add value to and improve the Group’s operations.
For impartiality and independency, the Internal Auditor reports directly to the Audit Committee on its findings and recommendations.
Any necessary corrective action after reporting to the Board by the Audit Committee will be monitored by the management.
During the financial year under review, the Internal Auditor carried out its audit assignments as approved by the Audit Committee.
The audit subjects were selected based on a risk assessment exercise reviewed by the Audit Committee. The Audit Committee
received and reviewed the Internal Audit Reports highlighting audit issues, recommendations and management response and
directed actions to be taken by management to rectify and improve the system of risk management and internal control.
The audit work conducted by the Internal Auditors during the financial year ended 31 December 2013 are as follows:
(i)
Segregation of Duties Review of KKB Engineering Berhad (with a focus on the direct operations of Steel Fabrication and
LPG Cylinders Manufacturing Divisions)
(ii)
Segregation of Duties Review of KKB Industries (Sabah) Sdn Bhd
(iii)
Insurances Review Audit
(iv)
Stocking & Stocktaking Procedure and Valuation of Inventories of KKB Engineering Berhad
AUDIT COMMITTEE REPORT (CONT’D)