MSM Malaysia Holdings Berhad Annual Report 2020

AUDIT, GOVERNANCE AND RISK COMMITTEE REPORT • Reviewed the following reports and recommended them for the Board’s approval for inclusion in the Annual Report for the financial year 2019: i) Corporate Governance Overview Statement. ii) Audit Committee Report. iii) Statement on Risk Management and Internal Control. iv) Sustainability Reporting on Economic, Environmental and Social. The Committee reviewed the reports with focus on meeting the MMLR and reporting best practises based on the guidance from the MCCG 2017, Guidance to Directors of Public Listed Companies on the Statement on Risk Management and Internal Control and other best practise references. • Reviewed and approved the schedule of Audit Committee meetings for year 2021. EXTERNAL AUDITOR POLICY The External Auditor Policy (“Policy”) was developed to provide guidance on matters related to dealing with the firm of professional accountants which is or will be appointed as the External Auditor for the statutory audit of MSM Group. This policy was approved by the Board on 23 February 2016. The Policy covers appointment and re-appointment of external auditors, assessment of external auditors’ performance and independence, audit partner rotation, audit delivery and reporting, engagement of external auditor for non-audit services and removal of external auditor. During the financial year ended 31 December 2020, other than the assurance service for review of Quarterly Bursa announcement, there was no other non-audit services rendered by the external auditors. CONTINUOUS LEARNING AND DEVELOPMENT The Committee members are regularly kept updated on changes to accounting standards and issues related to financial reporting through quarterly meetings. The members of the Committee had attended various seminars, training programme and conferences to keep abreast with changes in the industry and business environment. A training on the Malaysian Financial Reporting Standards (“MFRS”) was conducted by PwC on 1 December 2020, which provided update to the Committee on MFRS impacting MSM Group. Further details on the training attended by the Committee members during the financial year 2020 are detailed out in the Corporate Governance Overview Statement under Directors’ Training on page 84 of this Annual Report. COMMITTEE EVALUATION For year of assessment 2020, Board Evaluation Assessment was carried out in 2021 which encompassed the performance of the Committee and its Chairman as well as the Independence of the Independent Directors. The assessment focused on how effective the Committee had conducted its activities in 2020. INTERNAL AUDIT FUNCTION The Internal Audit function for MSM Group is outsourced to the holding company, FGV Holdings Berhad (“FGV”) Group Internal Audit (“GIA”) Division. The Chief Internal Auditor reports functionally directly to the AGRC of MSM. The conduct of GIA is based on a Group Internal Audit Charter, which was established consistent with the requirements of Institute of Internal Auditor’s International Professional Practise of Framework and affirmed through a Quality Assurance Review once every five (5) years with the most recent review in 2020. The Chief Internal Auditor, Zalily Mohd. Zaman Khan, is a fellow member of CPA Australia, a professional member of the Institute of Internal Auditors Malaysia, a Certified Internal Auditor of the Institute of Internal Auditors, USA and holds an accounting degree from University of South Australia. She has accumulated over 30 years of experience in various industries. Four (4) internal auditors comprising of a Senior General Manager, a Senior Manager and one team of two (2) persons are specifically assigned for audits of MSM Group throughout the financial year. The team is supplemented with personnel from other segments of FGV’s GIA’s Division where it is deemed required. This includes the IT audit, investigation and consulting support. MSM MALAYSIA HOLDINGS BERHAD Annual Repor t 2020 96 CHAIRMAN’S STATEMENT DELIVERING VALUE MSM OVERVIEW MANAGEMENT DISCUSSION & ANALYSIS GROUP FINANCIAL REPORT