Kimlun Corporation Berhad Annual Report 2020

AUDIT COMMITTEE REPORT SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE During the financial year, the AC met five times. In line with the terms of reference of the AC, the following activities were carried out by the AC during FY2020 in discharging its functions: (1) External Audit (a) Met with the external auditors three times during FY2020 on 27 February 2020, 22 April 2020 and 27 November 2020 respectively on matters relating to the audit and financial statements without the presence of Management and Executive Directors; (b) Reviewed and discussed with the external auditors on their scope of work, engagement team, audit timeline, areas of audit emphasis, focus on key audit matters, the identification of significant changes to the business operations arising from COVID-19 that would impact the planning and execution of the audit, accounting standards updates that affected financial reporting, the responsibilities of Directors and Management, and the FY2020 audit planning memorandum; (c) Reviewed and discussed with the external auditors the results of their audit, their comments and conclusions on the significant audit findings, the inclusion of additional area of audit emphasis on the impacts of COVID-19 on the Group and an appropriate disclosure in the financial report, the audit report, management letter and their evaluation of the internal controls; (d) Sought clarification from the Management on significant financial reporting issues, judgments made by the Management and matters highlighted by the external auditors. The AC was satisfied with the clarification from the Management and the actions taken by the Management to address the matters highlighted; (e) Reviewed the audit fees proposed by the external auditors and recommended the fees to the Board of Directors for approval; (f) Assessed the suitability, objectivity and independence of the external auditors. In its assessment, the AC considered several factors, which included adequacy of experience and resources of the firm, the professional staff assigned to the audit and the level of non-audit services to be rendered CZ UIF FYUFSOBM BVEJUPST &SOTU :PVOH 1-5 i&:w Written assurance was received from the external auditors confirming their independence in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants. Being satisfied with EY’s performance, technical competency and audit independence, the AC recommended the appointment of EY as external auditors for FY2020. (2) Financial Reporting (a) Reviewed the quarterly unaudited financial results, audited financial statements and Annual Report before recommending for the Board’s approval focusing particularly on:- (i) changes in or implementation of major accounting policy changes; (ii) significant matters highlighted including financial reporting issues, significant judgments made by management, the impacts of COVID-19 and the control measures taken by the Malaysia Government and Singapore Government to contain COVID-19 on the operations of the Group, significant and unusual events or transactions, key audit matters and how these matters are addressed; (iii) compliance with accounting standards and other legal requirements; and (iv) the going concern assumption. The AC obtained the advice of the Company’s Secretary and external auditors on compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the applicable approved Financial Reporting Standards issued by the Malaysian Accounting Standards Board, and other legal requirements; (b) Invited the Finance Director to all AC meetings to facilitate direct communication as well as to provide clarification on the financial results of the Group, the changes in or implementation of major accounting policy changes. (3) Internal Audit (a) Met with the internal auditors four (4) times during the year without the presence of any Executive Directors or Management of the Group; (b) Reviewed the internal audit plan, the adequacy of the scope and coverage of activities of the Group, functions, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work; (c) Reviewed and deliberated on the audit findings in the internal audit reports tabled during the year, the audit recommendations made and Management’s responses and/or actions taken to these recommendations. The AC briefed the Board on audit findings, sought clarifications from the Executive Directors on internal control matters and provided its views and recommendations on areas where improvements could be made; Annual Report 2020 050