117 ANNUAL REPORT 2024 MST GOLF GROUP BERHAD B1: BOARD COMMITTEES FOR AUDIT AND RISK MANAGEMENT Audit Committee and Governance, Risk and Sustainability Committee Prior to 28 August 2024, the AC functioned as the ARMC, carrying out responsibilities in assisting the Board in overseeing the Group’s financial and reporting process, its system of internal controls as well as the risk management functions, covering both financial and business operations’ processes. These include identifying, evaluating and monitoring of significant risks affecting the Group. To enhance the Group’s focus on governance, risk management and sustainability, the GRSC was established on 28 August 2024. With the formation of the GRSC, the key responsibility for risk management was transitioned from the ARMC to the GRSC, enabling the newly restructured AC to focus on the oversight on financial reporting process and the internal and external audit process. The details on AC composition and activities are set out in the Audit Committee Report of this Annual Report. The GRSC, on the other hand, supports the Board by overseeing the Group’s risk management framework and processes, ensuring the identification, assessment and mitigation of key risks, while also addressing broader governance and sustainability matters. The summary of works and activities undertaken by the GRSC in FY2024 are as follows: (a) Reviewed report from the Management on the Group’s risk management framework, key risks identified and external factors that may impact strategies and operations. This is to ensure that the risk management framework remains effective and relevant, the mitigation actions are adequate, and the Board is able to make informed decisions and adapt to changes. (b) Reviewed report from the Management regarding the Group’s sustainability initiatives, programs, training efforts, compliance with new reporting requirements and overall progress, to ensure alignment with the Group’s sustainability objectives. (c) Reviewed before recommending to the Board, new and revised governance policies proposed by the Management. PRINCIPLE B EFFECTIVE AUDIT AND RISK MANAGEMENT The Board adopts best practices on mandating a cooling-off period of a minimum of three (3) years if a former key external audit partner is to be considered for appointment as a member of the AC. None of the Directors were a former partner of the Company’s external audit firm. The AC (and previously, ARMC) and the GRSC are governed by Terms of Reference that are approved and adopted by the Board. The Terms of Reference are assessed, reviewed and updated periodically or as and when there are changes to the regulatory requirements and changes to the direction or strategies of the Group that may affect the committees’ roles. All Board Committees’ Terms of Reference are available for viewing on the Company’s corporate website. Internal Auditors The Group outsourced its internal audit function to Sterling Business Alignment Consulting Sdn. Bhd. (“Sterling“), who operates independently and reports functionally and directly to the AC (and previously, ARMC) while maintaining administrative accountability to the Group CEO. The details on internal audit function are disclosed in the AC Report and Statement on Risk Management and Internal Control of this Annual Report. B2: RISK MANAGEMENT AND INTERNAL CONTROL The Board recognises the importance of sound systems on risk management and internal control in safeguarding the assets and interests of the Group as well as its stakeholders. The risk-based internal control framework of the Group incorporates various control mechanisms, covering strategic, operational, reporting and compliance aspects. The Group’s risk management and internal control framework is described in further details in the Statement on Risk Management and Internal Control in pages 123 to 125 of the Annual Report.
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