Serba Dinamik Annual Report 2021

Integrated Report 2021 245 AUDIT & RISK COMMITTEE REPORT Audit are the permanent invitees to the ARC meetings, to provide input, advice and furnish appropriate relevant information especially on audit issues and updates on the Group’s operations. In addition, relevant Management members of the respective auditees were invited to brief the ARC on specific issues arising from the audit reports or on any matters of interest. The external auditors also attend the ARC meeting to present its Audit Planning Memorandum (“APM”) for the financial year as well as result of the statutory audit conducted on the Group. The Chairman of the ARC would provide input on highlighting significant points of decisions and recommendations made by the ARC to the Board for consideration and approval at the Board meetings. During the financial year, the ARC met the external auditors twice without presence of the Management. Minutes of each ARC meeting were recorded and tabled for confirmation at the next ARC meeting and subsequently presented to the Board for notation. The agenda and a set of meeting papers encompassing qualitative and quantitative information relevant to the business of the meeting are distributed to the ARC members five (5) business days prior to the meeting dates. SUMMARY OF ACTIVITIES The ARC executed the following activities during the financial year ended 30 June 2021: Financial Reporting External Audit Internal Audit ACTIVITIES DELIBERATION The ARC had reviewed the unaudited quarterly and half-yearly financial results as well as the annual audited financial statements of the Group. The review, covers among others, an assessment on the appropriateness of the accounting policies applied. The ARC had sought explanations and additional information from the Senior Management including the Group Chief Financial Officer on the reasons for the variances / fluctuations in the financial performance of the Group, including the key income and operating expenses. In reviewing the quarterly and annual financial results, the ARC focused on the following: • Profits contribution by domestic and overseas operations; • Profits contribution by business segments; • Trends on financial ratios such as return on equity, net interest margin, cost of funds, cost to income ratio, loan loss allowances ratio and capital ratio; and • Significant issues relating to adoption of accounting policies and fiscal reporting. • ARC reviewed and evaluated Nexia’s audit plan for the financial year ended 30 June 2021. Nexia’s audit plan covers its engagement team, concept of materiality, independence and objectivity, and the areas of audit emphasis. • ARC also reviewed key audit issues raised by Nexia from its annual audit in its management letter including Management’s responses/actions taken on the resolution of such issues. • Reviews the written assurance provided by the external auditors in respect of their independence; and • Met with the external auditors twice without the presence of the Executive Director and Management during the year under review. In its oversight over the Internal Audit Function, ARC has performed the followings: • Approved the internal audit framework and the annual audit plan to ensure adequate scope and comprehensive coverage over the activities of the Group and ensured that all high-risk areas are audited at least annually.