2020 UEM Edgenta Annual Report

AUDIT COMMITTEE The Audit Committee (“AC”) led by Mr. Robert Tan Bun Poo assists the Board in its oversight of the Company’s financial reporting, and in fulfilling its fiduciary responsibilities relating to internal controls. This includes risk management, maintenance of financial and accounting records and setting policies as well as financial reporting practices of the Group. It also reviews related party transactions, conflict of interest situations that may arise within the Group and the provision of non-audit services by the External Auditors. The AC comprises of three (3) members, all of whom are Non-Executive Directors, with a majority of them being Independent Directors. Kindly refer to page 122 for the AC’s membership and composition and the AC Report for the summary of work carried out by the AC during the financial year 2020. The duties and responsibilities of the AC are set out in its Terms of Reference which is available at the Company’s website at www.uemedgenta.com. The Board, through the AC maintains a transparent and professional relationship with the Internal and External Auditors. The AC has been explicitly accorded the authority to communicate directly with both the Internal and External Auditors. Currently, Messrs Ernst & Young PLT provides independent and professional external auditing services to the Group. The AC conducts yearly assessment on the suitability and independence of the External Auditors. For the year under review, the External Auditors have confirmed to the Board their independence in providing their services. The AC meets up with the External Auditors at least twice a year in the absence of the Managing Director/Chief Executive Officer and Management. The External Auditors were also present at Board Meetings for the presentation of their reports. The Board is satisfied with the outcome of the assessment of the External Auditors on their suitability and independence, and will be recommending for their re-appointment at the forthcoming annual general meeting, subject to the approval of the shareholders. EFFECTIVE AUDIT AND RISK MANAGEMENT RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK Effective Risk Management and Internal Control Framework The Board has overall responsibility for the system of Risk Management and Internal Control which includes financial controls, operational and compliance controls to ensure that shareholders’ investments, customers’ interests and the Company’s assets are safeguarded. The Board discharges its risk governance and oversight functions via the Board Governance and Risk Committee (“BGRC”) who undertake governance and compliance duties and responsibilities in addition to the oversight of risk management matters and reviews the effectiveness of risk management framework to manage the overall risk exposure to the Group, monitor the exercise of Integrity & Governance Unit and overseeing the overall issue of corruption, fraud, malpractice & unethical conduct within the organisation. While the BGRC is responsible for assessing and monitoring the efficacy of the risk management controls and measures taken, the AC is responsible for the review of the adequacy and effectiveness of the internal controls through the work performed by the Internal Audit function. For the year under review, the BGRC comprises four (4) members with a majority being Independent Non-Executive Directors, and operates within defined terms of reference. The Statement on Risk Management and Internal Control as set out on pages 138 to 147 of this Annual Report provides an overview of the state of internal controls within the Group. UEM EDGENTA BERHAD 132 Governance CORPORATE GOVERNANCE OVERVIEW STATEMENT