PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT I. Audit and Risk Management Committee The Audit and Risk Management Committee of the Company comprises three (3) members, all of whom are Independent Non-Executive Directors. The Chairman of the Audit and Risk Management Committee is a member of the Malaysian Institute of Accountants. The Audit and Risk Management Committee has adopted the policy that requires the observation of at least three (3) years cooling-off period for a former key audit partner to be appointed as a member of the Audit and Risk Management Committee and this has been incorporated in the Terms of Reference of the Audit and Risk Management Committee. The Board acknowledged that the Audit and Risk Management Committee should be financially literate and are able understand matters under the purview of the Audit and Risk Management Committee including the financial reporting process besides possess a wide range of necessary skills to discharge its duties. The Board ensures that all members of the Audit and Risk Management Committee should undertake continuous professional development to keep themselves abreast of relevant developments in accounting and auditing standards, practices and rules. The Terms of Reference of Audit and Risk Management Committee is available at the Company’s Website and the activities undertaken by the Audit and Risk Management Committee for the FY2021 are presented in the Audit and Risk Management Report on pages 56 to 60 of this Annual Report. II. Risk Management and Internal Control Framework The Board discharges its responsibilities in the risk governance and oversees functions through the Audit and Risk Management Committee. The Audit and Risk Management Committee, supported by the Risk Management Team comprises the Head of Departments of respective operating divisions, assists Audit and Risk Management Committee in overseeing the risk management matters relating to the activities of the Group. The Audit and Risk Management Committee reviews the risk management framework and processes and monitors the effectiveness of risk treat/mitigation action plans for the management and control of identified key risks. The adequacy and effectiveness of the internal controls are reviewed by the Audit and Risk Management Committee in relation to internal audit function of the Group. The Board places significant emphasis on maintaining a sound system of internal control covering not only financial controls but also operational and compliance controls as well as risk management in order to safeguard shareholders’ investments and the Group’s assets. The Board continuously reviews the adequacy and effectiveness of the internal control system to ensure it meets the Group’s particular needs and to manage the risks to which it is exposed. The Statement on Risk Management and Internal Control set out on Page 52 to Page 55 of this Annual Report provides an overview of the state of risk management and internal controls within the Group. P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 48 CORPORATE GOVERNANCE OVERVIEW STATEMENT (cont’d)
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