cont'd - KNM Steel Sdn Bhd

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<strong>KNM</strong> GROUP BERHAD I Annual Report 201225Corporate Governance Statement (cont’d)ACCESS TO INFORMATION AND ADVICEThe Directors, whether individually or as a full Board, have full and direct access to all information of the Companyand advice of the Company Secretaries and independent professionals at the Company’s expense in furtherance oftheir duties, wherever necessary and on a case to case basis depending on the complexities of the matter involved.Currently, the Group’s Company Secretaries effect all proper documentation, to meet all statutory obligations andcompliances as well as to support the Chairman of the Board in ensuring the effective functioning of the Board. TheCompany Secretaries meet the requirements for the discharge of their duties and his/her removal is a matter forthe Board as a whole.ACCOUNTABILITY AND AUDITFinancial ReportingShareholders are provided with fair assessments on the Company’s financial performance and prospects vide timelyissuance of all quarterly reports, annual audited financial statements and announcements on significant developmentsaffecting the Company in compliance with the Listing Requirements and/or the Companies Act 1965 (“the Act”).The Board is assisted by the external auditors, the Company Secretaries and the Audit Committee to scrutinizeinformation for disclosure to ensure its timeliness, accuracy and adequacy.Directors’ Responsibilities for the Financial StatementsPursuant to the Act, the Directors are required to prepare and ensure that financial statements are drawn up inaccordance with the applicable approved accounting standards in Malaysia and the provisions of the Act so as togive a true and fair view of the state of affairs of the Company and the Group for each financial year.The Directors have overall responsibility for taking such steps as are reasonably open to them to safeguard theassets of the Group, and to detect and prevent frauds or other irregularities. The Directors are also responsible forensuring that the Company keeps proper accounting records which disclose, with reasonable accuracy, the financialposition of the Company and the Group and in compliance with the applicable approved accounting standards andthe provisions of the Act.The annual financial statements are audited by external auditors in accordance with the approved standards onauditing in Malaysia. In conducting the audit, the external auditors will obtain reasonable assurance that the financialstatements are free of material misstatements. The external auditors assess the accounting principles used andsignificant estimates made by Directors in addition to evaluate the overall presentation of the financial statements.Internal Controls and Internal Audit FunctionsThe Board has overall responsibility for maintaining a sound system of internal controls to safeguard shareholders’investment and the Group’s assets, which encompasses risk management, financial, organizational, operationaland compliance controls necessary for the Group to achieve its objectives within an acceptable risk profile. Thesecontrols can only provide reasonable but not absolute assurances against material misstatements, errors of judgmentand losses or frauds.Internal Audit function is established by the Board for the Group to review the adequacy of operational controlssystem, and in identifying, evaluating, monitoring and managing risks to provide reasonable assurance that suchsystem will continue to operate satisfactorily and effectively in the Group. The Internal Audit function adds valueand improves the Group’s operations and assist the Audit Committee to effectively discharge its duties by providingindependent and objective assurance.
26<strong>KNM</strong> GROUP BERHAD I Annual Report 2012Corporate Governance Statement (cont’d)The Internal Audit function reports directly to the Audit Committee and operates in accordance with the framework setout by the Internal Audit Charter as approved by the Audit Committee. It is independently positioned to assist the Boardand Audit Committee in obtaining the assurance they require in relation to the effectiveness of the Group’s systemof internal controls. The Head of Internal Audit regularly reviews and appraises the systems of risk management,internal controls and governance processes within the Company and/or the Group.The Company’s Internal Audit function is competently and adequately resourced to fulfil its purpose and perform itsactivities. It is currently managed and performed in-house and the costs attributable to the discharge of duties andperformance of the Internal Audit function of the Company for the financial year under review is RM481,000 (2011:RM381,000).More details of the system of internal controls of the Company are set out in the Statement on Risk Managementand Internal Control.Relationship with the AuditorsThe Company maintains a transparent and professional relationship with its internal and external auditors at all times.Under its terms of reference, the Audit Committee has explicit authority to communicate directly with the Company’sinternal and external auditors. The Audit Committee reviews the appointment of the Company’s external auditorsand the fees payable to them on an annual basis. Meetings with the senior management, internal and/or externalauditors are held as appropriate to discuss any issues arising from the interim and final audits, audit plans, auditfindings and any other matters of concern that the internal and/or external auditors may wish to discuss. The AuditCommittee meets the external auditors at least twice a year or whenever deemed necessary without any managementor Executive Board members present.The Audit Committee also receives other information such as that of the non-audit services provided by the externalauditors. Based on such information, the Audit Committee has no reason to believe that such engagements haveimpaired or would impair the independence of the external auditors.Further details of the terms of reference and activities of Audit Committee during 2012 are set out in the AuditCommittee Report.SHAREHOLDERSThe Company provides an open channel of communication with its shareholders, institutional investors and theinvesting public at large with the objectives of inter alia, providing timely, clear and complete information of theGroup’s operations, updates, performance and new development based on permissible disclosures. The Companyvalues feedbacks and dialogues with its investors, and believes that a constructive and effective investor relationshipis essential to enhance shareholder value.Communication with shareholders is also maintained by way of immediate announcements made in connection withmaterial developments in the Company’s business and operations in addition to the timely issuance of quarterly andannual reports. Whilst the Company is endeavour to provide as much information as possible to its shareholdersand other stakeholders, it is mindful of the legal and regulatory framework governing the release and disclosure ofmaterial and/or price-sensitive information. Information which is price-sensitive or those which may be regarded asundisclosed material information about the Group will not be disclosed until after the prescribed announcement hasbeen released to Bursa Malaysia Securities Berhad (“Bursa”).Investor RelationsThe Company uses the following key investor relations activities to update its investors:-1) holding briefings, plant visits, conference calls and meetings with the institutional fund managers and financialanalysts;2) participating in roadshows and investors’ conferences, both domestically and internationally; and3) establishing a website at www.knm-group.com for easy access and dissemination of the Group’s corporateinformation, quarterly and annual financial results, announcements to Bursa, news and latest happenings.
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cont'd - KNM Steel Sdn Bhd

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