GHL System Berhad Annual Report 2019

G H L S Y S T E M S B E R H A D 1 9 9 4 0 1 0 0 7 3 6 1 ( 2 9 3 0 4 0 - D ) 58 SUMMARY OF ACTIVITIES DURING FINANCIAL YEAR ENDED 31 DECEMBER 2019 (Cont’d) External Audit: a. Reviewed the performance, assessed 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 caliber 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 FY2019, non-audit services rendered by the External Auditors for the Group amounted to RM28,970 for the review of Statement of Risk Management and Internal Control, due diligence on potential investments and letter of certification; and f. Review the performance of the External Auditor and recommended to the Board on the re-appointment of BDO PLT as External Auditors and their fees. Risk Management and Internal Control: a. Reviewed the minutes of meeting and the progress of Risk Management Committee (“RMC”) in its on-going identification and monitoring of key risks and the controls and processes implemented in managing these risks; b. Reviewed the key risks as reported by the RMC in respect of businesses and operations; c. Reviewed the action plans by RMC to ensure significant internal controls are promptly implemented to mitigate the key risks identified; d. Evaluated, together with Group CEO, Group CFO, and Group CRO, the overall adequacy and effectiveness of the system of internal controls during the financial year through a review of the results of work performed by Internal Auditors, External Auditors, and the RMC; and e. Monitored the Whistle Blowing programme as part of the risk management structure and good corporate governance practice. Internal Audit: a. Reviewed and assessed the adequacy of resources and reporting structure of Group Internal Audit (“GIA”) to ensure the audit plan is executed effectively and independently; b. Reviewed the competency of GIA to ensure GIA are provided with adequate trainings and guidance to possess the required skill sets and knowledge; c. Reviewed the annual internal audit plan to ensure adequacy of scope and coverage of the auditable areas i.e. high risk areas were audited on a regular basis; AUDIT AND RISK COMMITTEE REPORT CONT’D