My EG Services Berhad Annual Report 2019

ANNUAL REPORT 2019 79 B. EFFECTIVE AUDIT AND RISK MANAGEMENT I. ARMC During FP2019, the ARMC consists of three (3) Independent Non-Executive Directors and all of them are financial literate and have sufficient understanding of the Group’s business. All the members of the ARMC undertook continuous professional development to keep abreast of relevant developments in accounting and auditing standards, practices and rules. The composition of the ARMC is presented in the ARMC Report on page 82 of the Annual Report. The Chairman of the ARMC is not the Chairman of the Board, ensuring that the impairment of objectivity on the Board’s review of the ARMC’s findings and recommendation remains intact. The ARMC’s Terms of Reference has adopted a terms of reference which sets out its goals, objectives, duties, responsibilities and criteria on the composition of the ARMC which includes a former key audit partner of the Group to observe a cooling-off period of at least two (2) years before being able to be appointed as a member of the ARMC. In presenting the annual audited financial statements and interim financial statements on a quarterly basis to the shareholders, the Board is responsible to present a clear, balanced and understandable assessment of the Group’s performance and position. The ARMC is entrusted to provide assistance to the Board in reviewing the Group’s financial reporting process and accuracy of its financial results, and scrutinising information for disclosure to ensure accuracy, adequacy, completeness and compliance with the accounting standards. The Board places great emphasis on the objectivity and independence of the external auditors. Through the ARMC, the Board maintains a transparent relationship with the external auditors in seeking professional advice on the internal control and ensuring compliance with the appropriate accounting standards. The ARMC is empowered to communicate directly with the external auditors to highlight any issues of concern at any point in time. The external auditors would meet the ARMC without the presence of the executive Board members and Management at least two (2) times a year on matters relating to the Group and its audit activities. During such meetings, the external auditors highlight and discuss the nature and scope of the audit, audit programme, internal controls and any other issues that may require the attention of the ARMC or the Board. The ARMC ensures the external audit function is independent of the activities it audits and reviews the contracts for the provision of non-audit services by the external auditors in order to make sure that it does not give rise to conflict of interests. The excluded contracts would include management consulting, internal audit and standard operating policies and procedures documentation. For the FP2019, fees paid to the external auditors, Messrs Crowe Malaysia PLT and its affiliated firms by the Group are stated in the table below:- Nature of Services Company (RM’000) Subsidiaries (RM’000) Audit 68 291 Non-Audit: Review of the Risk Management and Internal Control Statement 3 - CORPORATE GOVERNANCE STATEMENT (CONT’D) GOVERNANCE