AUDIT COMMITTEE REPORT A. F INANCIAL STATEMENTS AND CORPORATE GOVERNANCE 1. R eviewed the quarterly and annual financial statements of the Company and of the Group; and recommended them for Board’s approval, focusing particularly on:- a) a ppropriateness and relevance of accounting policies and practices adopted and their application in compliance with current accounting standards; b) any significant non-recurrent or unusual transactions made or events occurred during the year; c) a ny 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 statements; e) significant accounting and auditing matters including financial reporting issues, estimates or judgements made by Management, unusual events or transactions, and how these matters are addressed; and f) c ompliance with financial reporting standards and other regulatory requirements. The Board is pleased to present the Audit Committee (“AC”) Report which provides insights on how the AC discharge its function and duties for the financial year ended 31 December 2022. The AC assists the Board in its oversight of the Company’s financial reporting, and in fulfilling its fiduciary responsibilities relating to internal controls. This includes overseeing the proper maintenance of financial and accounting records and setting policies as well as financial reporting practices of the Group. It also reviews related party transactions and conflict of interest situations that may arise within the Group. COMPOSITION AND MEETING ATTENDANCE The composition of the AC and meeting attendance for financial year 31 December 2022 are available in pages 222 to 223 of the Corporate Governance Overview Statement. SUMMARY OF ACTIVITIES OF THE AC During the year, the Chairperson of AC met the Internal Audit team regularly and had pre-meeting discussions of their activities and reports. In line with the terms of reference of the AC, the following works were carried out by the AC during the financial year ended 31 December 2022:- 2. Reviewed 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. R eviewed 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, AC Report and Statement on Risk Management and Internal Control, to the Board for its approval. 5. C onsidered the proposed change of segmental disclosure for alignment with the Edgenta of the Future 2025 (“EoTF 2025”) vision. B. INTERNAL AUDIT 1. Reviewed the scope, functions and resources of the Internal Audit Department (“IAD”) to ensure that it had the necessary competency, independence and authority expected by the professional standards and applicable guidelines to carry out its work professionally and with impartiality and propriety. 2. Reviewed and deliberated the internal audit reports (planned and ad-hoc) and ensured that audit observations and appropriate recommendations were discussed and agreed with Management including timelines set to be taken for remedial actions on gaps or lapses of controls or procedures identified by IAD. 3. Reviewed the status of implementation, effectiveness, and adequacy of management’s corrective actions through follow-up audit reports to ensure all key risks and control issues were addressed adequately and in a timely manner. 4. R eviewed and approved the Internal Audit Plan, including changes for adequacy and appropriateness of coverages. The above included the risk-based planning methodology, high-level review scope and its manpower requirement for the proposed audit activities. 5. A ssessed and approved the performance rating of IAD and the IAD Scorecard. 6. A ssessed and recommended the appointment of new Head of Internal Audit for the Board’s approval. 7. S uggested additional improvement opportunities in the areas of internal control, systems and operational efficiency. C. EXTERNAL AUDIT 1. Reviewed with the External Auditors:- a) T he audit plan, audit methodology and scope of work, especially on areas identified for audit focus for the year; b) Their comments and issues arising from their annual audit, their audit report and management letter of comments on the group internal control; c) T he key audit matters highlighted for inclusion in the audit report and the audit process in addressing them; and d) T he Group’s financial reporting process including consolidation. 2. Assessed the objectivity, suitability and independence of the External Auditors in carrying out their audit during the year and this included their appointment for non-audit services. 3. D iscussed with the External Auditors on 22 November 2022 and 20 February 2023 without the presence of the Managing Director/Chief Executive Officer and Management, on any concerns/issues affecting their audit, the results of audit, including the level of cooperation rendered by Management in respect of their access to financial information and accounting records. 4. E valuated the performance of the External Auditors and due to their satisfactory performance based on the feedback received via assessment questionnaires and the 2021 Annual Transparency Report, recommended their re-appointment to the Board of Directors. 5. Reviewed and recommended the audit fees for the Board’s approval. AUDIT COMMITTEE REPORT p.234 p.235 UEM EDGENTA BERHAD INTEGRATED ANNUAL REPORT 2022 1 2 3 4 5 6 7 8 9 GOVERNANCE
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