Serba Dinamik Annual Report 2016

2016 Annual Report 091 AUDIT COMMITTEE REPORT 1. COMPOSITION The Audit & Risk Committee (“ARC”) was formed by the Board and the Committee members was appointed by the Board from amongst the Board members. The functions and duties of the ARC extends to the Company and all its subsidiaries (“Group”) as well as joint ventures and associate companies where management responsibility is vested on the Group. 2. FUNCTIONS & DUTIES The ARC shall carry out the following functions and duties: a) Financial Statements o Review the quarterly results and annual financial statements of the Group prior to the approval by the Board, focusing particularly on the following: • any changes in or implementation of major accounting policy changes; • major judgmental areas, significant and unusual events; • major judgmental areas; • significant adjustments resulting from audit; • the going concern assumption; and • compliance with accounting standards and other legal requirements. o Review, with the Group’s Counsel, any legal matter that could have a significant impact on the Group’s financial statements (as and when necessary). b) Internal Control o Assess the quality and effectiveness of the systems of internal control and the efficiency of the Group’s operations, particularly those relating to areas of significant risks. Evaluate the process the Group has in place for assessing and continuously improving internal controls. o Assess the internal process for determining and managing key risks other than those that are dealt with by other specific Board committees. o Review the evaluation by the internal and external auditors of the Group’s system of internal control and thereafter report the same to the Board. o Review External and Internal Audit reports and Management’s response and ensure that appropriate action is taken in respect of these reports. c) Internal Audit o Approve the Internal Audit Charter and review the adequacy of the scope, functions, competency and resources of the Internal Audit Function, and whether it has the necessary authority to execute its work. o Review the internal audit program and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the Internal Audit Function and thereafter report the same to the Board. Where actions are not taken within an adequate timeframe by Management, the ARC shall also report the same to the Board for its further action. o Consider the major findings of internal audit and management’s responses, monitor the implementation of any recommendations made therein and ensure effective coordination between the internal and external auditors. o Direct and where appropriate supervise any special project or investigations considered necessary, to be carried out by Internal Audit Function as and when necessary and consider the major findings of the internal investigations and Management’s response.