GHL System Berhad Annual Report 2018

G H L S y s t e m S B e r h a d ( 2 9 3 0 4 0 - D ) 40 COMPOSITION AND MEETINGS (cont’d) The ARC held two private meetings with the External Auditors in FY 2018 without the presence of the Management. At these meetings, the ARC enquired about Management’s co-operation with the External Auditors, their sharing of information and the competencies and adequacy of resources in the financial reporting functions, particularly in relation to the applicable Malaysian Financial Reporting Standards ("MFRS"). The ARC Chairperson also permitted the External Auditors to contact her at any time that they became aware of incidents or matters in the course of their audits or reviews that needed her attention or that of the ARC or Board. Minutes of each ARC meetings were recorded and tabled for confirmation at the following ARC meeting and subsequently presented to the Board for notation. TERMS OF REFERENCE (“TOR”) The Terms of Reference for the ARC which is in line with the provisions of the Main Market Listing Requirements of Bursa Malaysia (“MMLR”) and other best practices are accessible to the public on the Company’s official website at www.ghl.com . SUMMARY OF ACTIVITIES DURING FINANCIAL YEAR ENDED 31 DECEMBER 2018 The ARC reports regularly to the Board on its activities, deliberations and recommendations in discharging its duties and responsibilities as set out in its Terms of Reference, which the Committee has reviewed to ensure it is in line with MMLR and MCCG. The main activities undertaken by the Committee during the year under review are summarised as follows:- Financial Reporting: a. Reviewed the audited financial statements of the Group and of the Company together with the External Auditors and Group CFO to ensure compliance of the financial statements with the provisions of the Companies Act 2016 and the applicable approved accounting standards as per the Malaysian Accounting Standards Board (“MASB”) prior to recommending the same to the Board for approval; and b. Reviewed the quarterly unaudited financial results of the Company and the Group together with the Group CFO, focusing particularly on significant changes to accounting policies and practices, significant or unusual events, compliance with accounting standards and other legal requirements prior to recommending the same to the Board for approval and release to Bursa Malaysia. External Audit: a. Reviewed the performance, accessed the suitability and of the External Auditors’ independence in fulfilling their responsibilities as set out in the By-Laws (On Professional Ethics, Conduct and Practice) for Professional Accountants as adopted by Malaysian Institute of Accountant and the Group Policy Statement on Auditor Independence by covering the calibre of the external audit firm; quality of processes and performance during the audit; skills, industrial knowledge as well as objectivity; and their communications with ARC; b. Reviewed and discussed the External Auditors’ audit planning memorandum covering the audit scope, audit plan, key audit areas and proposed fees for the statutory audit and other non-audit services based on the External Auditors’ presentation of audit strategy and plan to ensure that their scope of work adequately cover the activities of the Group; c. Reviewed and discussed with the External Auditors on the audit results, audit reports and financial statements of the Group; d. Reviewed and discussed with the External Auditors on the issues highlighted in the management letter, the response from the Management and ensure, where appropriate, necessary corrective actions had been taken by Management. ARC also considered the External Auditors’ suggestions to improve the accounting procedures and internal control measures; e. Reviewed and discussed the non-audit fees in respect of services rendered by External Auditors if any, in line with the Group Policy Statement on Auditor Independence. During FY 2018, non-audit services had been rendered by the External Auditors for the Group amounting to RM146,655 for the review of Statement of Risk Management and Internal Control, due diligence on potential investments, advisory on accounting standards MFRS and briefing on tax standards; and f. Recommended to the Board on the re-appointment of BDO PLT as External Auditors and their fees. aud i t and r i sk commi t t e e report C O N T ’ D