MSM Malaysia Holdings Berhad Annual Report 2020

(iii) Performance of the Johor refinery and the impact of the loan covenants. (iv) Sales of plantation land in Perlis. (v) CIMB Islamic loan modification impact. • Held four (4) meetings with PwC in February, May, August and November 2020 to review the financial results and areas of concern identified from review of the financial results prior to the approval by the Board. During the year, amongst matters discussed are the following: (i) Assessment of onerous contracts provision in respect of forward sales export contracts. (ii) Impairment assessment on goodwill from Sugar Cluster. (iii) Status and performance of the Johor Refinery. (iv) Assessment of the Group’s plantation operations in accordance with MFRS 5. (v) Recoverability of trade receivables above credit terms and credit limit assessment. (vi) Inventory management. • Reviewed and approved the External Auditor’s Audit Plan and scope of work on 11 August 2020, which covered: 1) The focus areas planned for the 2020 financial audit by PwC as follows: i. Risk of Management override of controls (in line with International Standard of Auditing requirement). ii. Recoverability of non-current assets (including Goodwill). iii. Recoverability of inventories and adequacy provision of onerous contracts. iv. Ensuring revenue is recognised in the correct accounting period and that transaction price is appropriately supported. v. Rationalisation plan by Management – closure of MSM Perlis Sdn Bhd’s factory operations. vi. Risk on non-compliance of financial covenants attached to the construction of new sugar refinery. 2) Recent developments in laws and regulations covering the following: i. New Accounting and Auditing Standards. ii. Recent Tax Developments. iii. Section 17A of the Malaysian Anti-Corruption Commission Act 2009. 3) Declaration of PwC’s independence as external auditor. • Analysed the external audit fees proposed in respect of the scope of work required for the financial year and recommended the same for approval by the Board. • Reviewed the assessment of PwC as the external auditor for financial year 2019 for reappointment based on input from Management and recommended the same for approval by the Board. Related PartyTransactions • Analysed the quarterly report on Recurrent Related Party Transactions for monitoring of the transactions against the shareholders’ mandate from the 9 th AGM held on 17 June 2020. • Reviewed the Circular to the shareholders to seek mandate on the existing and new Recurrent Related Party Transactions of the Group and recommended the same for approval of the Board. • Reviewed the internal audit report on review of the Recurrent Related Party Transactions procedures. Integrity, Governance & Risk Management • Reviewed the quarterly Progress Report on Corporate Governance Activities, Group Risk Register Report and Business Continuity Management (“BCM”). • Reviewed the Limit of Authority (“LOA”) for MSM Group of Companies. • Reviewed the Anti-Bribery Policy Statement and Whistleblowing Policy for MSM Group pursuant to the Paragraph 15.29 of MMLR and Section 17A of the Malaysian Anti-Corruption Commission (“MACC”) Act 2009 (Amended 2018) which came into force on 1 June 2020. MSM MALAYSIA HOLDINGS BERHAD Annual Repor t 2020 95 SUSTAINABILITY REPORT EFFECTIVE LEADERSHIP CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION DETAILS OF THE ANNUAL GENERAL MEETING