MSM Malaysia Holdings Berhad Annual Report 2019

AUDIT COMMITTEE REPORT SUMMARYOF WORKOF THE INTERNAL AUDIT FUNCTION GIA provides independent and objective assurance of the adequacy and effectiveness of risk management, controls and governance processes covering all operations of the Group. In conducting their independent audits, GIA adopted a risk based internal audit approach by focusing on the assessment of significant risk areas. During the financial year under review, GIA has undertaken the following main activities: a) Reviewed GIA’s three year audit plan and forms the basis to derive the Annual Group Internal Audit Plan. The three year audit plan was developed based on the exposure prioritisation. Once the key audit areas are developed, the staff and resource allocation plan, budget estimates and staff development progress are established to support the Audit Plan. The Annual Group Internal Audit Plan is presented to the AC for approval. b) Carried out internal audits according to the Annual Group Internal Audit Plan approved by the AC and reported the findings, recommendations and management’s corrective action directly to the AC with copies to the relevant management for their action. The scope of work was focused on the following key areas:- • Governance Framework and Structure • Finance Processes • Inventory Management • Trading Processes • Project Management • Procurement • Fixed Asset Management In 2019, GIA undertook seven internal audit assignments (i.e. three assurance audits, two special reviews and two investigations) which consumed 592 mandays in comparison to 526 budgeted mandays during the year. c) Presented to the AC at its quarterly meetings, key findings from the internal audit reports issued. d) Reported to the AC, the progress of the findings, recommendation and management’s corrective action implementation from internal audit reports issued. e) Undertook Recurrent Related Party Transactions review for the purpose of supporting the AC’s statement in the Circular to the shareholders to seek mandate on new and existing Recurrent Related PartyTransactions of the Group. f) In addition to the assurance role, GIA also undertook consulting role and investigation role. Key activities carried out were amongst others, as follows: i) Undertook investigation and reported the outcome of such investigations to the AC and management. ii) Provided feedback on the Statement on Risk Management and Internal Control 2018, the Report on the AC 2018 and the Corporate Governance Overview Statement 2018 before submission to the AC. STATEMENT BYTHE BOARD This AC Report is made in accordance with a resolution of the Board of Directors duly passed on 17 April 2020. MSM Malaysia Holdings Berhad | Annual Report 2019 88