During the annual general meeting that you attended last week, you heard the following comments made by Dato Badrul, one of the major shareholder for Newyours Sdn. Bhd:

I relatively not understand what this whole army of internal auditors is doing in the private sector. They are certainly useful in the public sector, where they must make sure that a whole multitude of laws, regulations, and directives are followed to the letter. But the situation is quite different in private business, where profit is an important source of motivation.

After a few years, I do not see any positive contribution or any significant impact ofinternal auditors could make to our company. I also realized that this group of internal auditing does not help us in terms of developing a good quality of management, strengthening our internal control system or improving the financial statements preparation.

We already spend a fortune on the annual audit of our financial statements and our external auditors are very competent. Furthermore, quite opposite to internal auditors, they are independent from management. In any event, the work has done by our external auditors gives us assurance that everything is well managed in our company and that we are well protected against fraud. Otherwise, they would not be able to give an unqualified opinion on our financial statements year after year.