MSM Malaysia Holdings Berhad Annual Report 2020

AUDIT, GOVERNANCE AND RISK COMMITTEE REPORT SUMMARY OF WORK OF THE INTERNAL AUDIT FUNCTION The Internal Audit function 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, the Internal Audit function adopted a risk based internal audit approach by focusing on the assessment of significant risk areas. During the financial year under review, the Internal Audit function has undertaken the following main activities: a) Developed the Annual Internal Audit Plan of MSM Group for year 2021 and presented the same to the AGRC for approval. b) Performed internal audits according to the Annual Internal Audit Plan approved by the AGRC and reported the findings, recommendations and Management’s corrective action directly to the AGRC with copies to the relevant Management for their action. The scope of work was focused on the following key areas: • Governance Framework and Structure • Financial Management including treasury function • Trading Processes • Supply Chain • Project Management • Sales and Marketing • Procurement • Human Resource In 2020, the internal audit function performed six (6) internal audit assignments (i.e. five (5) assurance audits and one (1) investigation) which consumed 1,085 mandays in comparison to 460 budgeted mandays during the year. c) Presented to the AGRC at its quarterly meetings, key findings from the internal audit reports issued. d) Prepared and presented to the AGRC, a report on 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 Committee’s statement in the Circular to the shareholders to seek mandate on new and existing Recurrent Related Party Transactions of the Group. f) In addition, the following were are delivered: a) Undertook investigations and reported the outcome of such investigations to the AGRC and Management. b) Provided feedback on the Statement on Risk Management and Internal Control 2019, Audit Committee Report 2019 and the Corporate Governance Overview Statement 2019. STATEMENT BYTHE BOARD This Audit, Governance and Risk Committee Report was made in accordance with a resolution of the Board of Directors duly passed on 25 March 2021. MSM MALAYSIA HOLDINGS BERHAD Annual Repor t 2020 98 CHAIRMAN’S STATEMENT DELIVERING VALUE MSM OVERVIEW MANAGEMENT DISCUSSION & ANALYSIS GROUP FINANCIAL REPORT