2019 UEM Edgenta Annual Report

110 111 UEM Edgenta Berhad UEM EDGENTA AT A GLANCE MESSAGE FROM OUR LEADERSHIP STRATEGIC FOCUS OPERATIONAL REVIEW SUSTAINABILITY EFFORTS CORPORATE GOVERNANCE INTRODUCTION FINANCIAL REVIEW ADDITIONAL INFORMATION Annual Report 2019 EFFECTIVE AUDIT EFFECTIVE AUDIT & RISK MANAGEMENT The Audit and Risk Committee (“ARC”) Report below provides insights on how the ARC discharged its function and duties for the financial year ended 31 December 2019. The ARC assisted the Board in its oversight of the Company’s financial reporting, and in fulfilling its fiduciary responsibilities relating to internal controls. This included risk management, maintenance of financial and accounting records and setting policies as well as financial reporting practices of the Group. The ARC also reviewed related party transactions and conflict of interest situations that arised within the Group. COMPOSITION The composition of the ARC and meeting attendance for financial year 31 December 2019 are available in pages 104 - 105 of this report. SUMMARY OF WORK OF THE ARC During the year, the Chairman of ARC met the Head of Risk Management and Head of Internal Audit regularly, had pre-meeting discussions of their activities and reports. In line with the terms of reference of the ARC, the following works were carried out by the ARC during the financial year ended 31 December 2019:- FINANCIAL STATEMENTS AND CORPORATE GOVERNANCE A 1. Reviewed the quarterly and annual financial statements of the Company and of the Group; and recommended them for Board’s approval, focusing particularly on:- a) appropriateness and relevance of accounting policies and practices adopted and their application; b) any significant non-recurrent or unusual year-end transactions made or events occurred during the year; c) any significant changes to the basis of preparation of the financial statements or new accounting standards adopted during the year which impacted the result or financial position of the Group; d) the going concern assumption used in the preparation of the financial statement; e) significant accounting matters highlighted, which included financial reporting issues, estimates or judgements made by Management, unusual events or transactions, and how these matters are addressed; and f) compliance with financial reporting standards and other regulatory requirements. 2. Reviewed non-recurrent and recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations in the ordinary course of business of the Company and its subsidiaries to ascertain as to whether they are undertaken on an arm’s length basis on normal commercial terms not more favourable to the related parties than those generally available to the public or those extended to unrelated parties and are not detrimental to the minority shareholders. 3. Reviewed the Circular to Shareholders in respect of the proposed shareholders’ mandate for recurrent related party transactions and proposed new mandate for additional recurrent related party transactions of a revenue or trading nature. 4. Reviewed and recommended the Corporate Governance Overview Statement, Corporate Governance Report and ARC Report, to the Board for its approval. 5. Reviewed jointly with the Board Tender Committee, the Discretionary Authority Limits for recommendation to the Board for approval. Corporate Governance Overview Statement Corporate Governance Overview Statement (e) Training and Development of Directors A training budget is allocated for Directors to attend relevant training programmes and seminars to enhance their knowledge and skills in discharging their duties. (f) Directors’ & Officers’ Liability Insurance The Company through UEM Group Berhad’s group-wide Directors’ and Officers’ Liability Insurance maintains coverage throughout the financial year to indemnify directors and officers against any liability incurred by them in the discharge of their duties while holding office as directors and officers of the Company. (g) Subsistence allowance for business travel • Peninsular & East Malaysia – RM150 per day • Overseas – USD125 per day The Company would be seeking shareholders’ approval at the forthcoming Annual General Meeting for the payment of Directors’ benefits for items (a) to (c) of the above table. Description Directors’ benefits (d) Medical benefits for Board members Where a Director sits on several boards within the UEM Group of Companies, he will only be entitled to claim medical benefits from one (1) company only. (i) Medical coverage of RM7,000.00 per annum, inclusive of outpatient, clinical, specialist and dental; and (ii) Hospitalisation of RM100,000.00 per annum including room and board at RM500.00 per day (c) Car allowance for Chairman of UEM Edgenta RM3,400 per month BOARD LEADERSHIP & EFFECTIVENESS (CONT’D)