CORPORATE GOVERNANCE OVERVIEW STATEMENT Cont’d PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT cont’d I. Audit Committee cont’d The AC comprises four (4) Independent Non-Executive Directors who play a key role in ensuring the integrity and transparency of corporate reporting. None of the AC members were former audit partners who are required to observe a cooling-off period of at least three (3) years before being appointed in accordance with the Terms of Reference of the AC. The AC provides robust and comprehensive oversight on financial reporting, objectivity and effectiveness of external and internal audit processes, reportable related party transactions, conflict of interest situations as well as risk management matters. The AC is chaired by an Independent Non-Executive Director, who is distinct from the Chairman of the Board. AC members possess the requisite financial literacy and business knowledge that support the sound understanding of matters under their purview, with the AC’s composition and performance being subject to annual review by the NCGC before recommendation to the Board for approval. The AC has unrestricted access to both the internal and external auditors, who report functionally and directly to the AC. The AC has established transparent arrangements to maintain an appropriate relationship with the Company’s auditors. Assessment of Suitability, Objectivity and Independence of External Auditors In the annual assessment of the suitability, objectivity and independence of the External Auditors, the AC is guided by the factors as prescribed under Paragraph 15.21 of the MMLR. The AC has also considered, amongst others, the following: (a) the External Auditors’ ability to meet deadlines in providing services and responding to issues in a timely manner as contemplated in the Audit Planning Memorandum; (b) the competence, audit quality and resources capacity of the External Auditors in relation to the audit; (c) the information presented in the Annual Transparency Report of the audit firm; (d) the nature of the non-audit services provided by the External Auditors and fees paid for such services relative to the audit fee; and (e) whether there are safeguards in place to ensure that there is no threat to the objectivity and independence of the audit arising from the provision of non-audit services or tenure of the External Auditors. In the third quarter of 2022, the Company’s external auditors, KPMG PLT presented its 2022 Audit Planning Memorandum which outlined its engagement team, audit timeline and areas of audit emphasis for the AC’s review. For FYE 2022, there was Audit Engagement Partner rotation which took place in line with Malaysia Institute of Accountants Audit Partner Rotation Requirement. As part of the AC’s review processes, the AC has obtained assurance from KPMG PLT, confirming that they are and have been independent throughout the conduct of the audit in accordance with the terms of relevant professional and regulatory requirements. Based on the AC’s assessment of the External Auditors, the Board is satisfied with the independence, quality of service and adequacy of resources provided by the External Auditors in carrying out the annual audit for the financial year ended 31 December 2022. In view thereof, the Board has recommended the re-appointment of the External Auditors for the approval of shareholders at the forthcoming 7th AGM. Internal Audit Function The Group has an in-house internal audit department, which is augmented with outsourced internal auditors for specialised expertise in selected areas. The internal audit function is independent of the activities or operations of the other operating units in the Group. The internal audit function adopts a risk-based audit approach when executing each audit assignment which is carried out in accordance with the annual audit plan. The annual audit plan covers the major subsidiaries of the Group. The internal audit function provides the AC and the Board with assurance regarding the adequacy and integrity of the systems of risk, governance and internal controls. ANNUAL REPORT 2022 60
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