Fraser & Neave Holdings Bhd Annual Report 2021

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT I. AUDIT COMMITTEE 1. COMPOSITION AND FUNCTIONS OF AUDITCOM The AuditCom of the Company comprises four Non- Executive Directors, three of whom including the Chairman of the AuditCom are Independent Directors. All members of the AuditCom are financially literate, possess an appropriate level of expertise and experience to enable them to discharge their duties and responsibilities pursuant to the AuditCom’s TOR. The Board is responsible for ensuring that financial statements are prepared in accordance with the Companies Act 2016 and applicable approved accounting standards in Malaysia so as to give a true and fair view of the state of a!airs of the Company and the Group. The Board recognises that an effective AuditCom is necessary in ensuring the Company’s financial statements are a reliable source of financial information. To assist the Board in this matter, the AuditCom is entrusted with the responsibility to review the quarterly reports and annual financial statements focusing particularly on compliance with applicable financial reporting standards and other legal requirements, changes in major accounting policies and practices, implementation of new accounting policies and practices, significant matters highlighted including financial repor ting issues, signif icant adjustments made by management, significant and unusual events or transactions, and how these matters are addressed. The AuditCom also assists the Board, among others, to oversee the Group’s external and internal audit functions; review any related party transactions and recurrent related party transactions and the relevant procedures to ensure compliance with the Listing Requirements. A summary of the activities of the AuditCom during the Financial Year 2021 is set out in the AuditCom Report. 2. ASSESSMENT OF EXTERNAL AUDITORS The Board maintains a transparent and professional relationship with the external auditors through the AuditCom. Under the existing practice, the AuditCom invites external auditors to attend all meetings of the AuditCom. In addition, the AuditCom will also have private meeting(s) with the external auditors without the presence of the CEO and senior management to enable exchange of views on issues requiring attention. During the Financial Year 2021, the AuditCom had met with the external auditors once without the presence of the CEO and senior management. The AuditCom conducts an annual assessment on the suitability, objectivity and independence of the external audi tor s. Areas of assessment include technical competencies, adequacy of specialist support and partners/ director accessibility and time commitment, independence and objectivity, audit scope and planning, audit and non- audit fees and audit communications to the AuditCom. The AuditCom ensures that the external auditors are independent of the activities they audit, and reviews the contracts for provision of non-audit services by the external auditors. Details of the non-audit fees incurred and the non- audit services provided by KPMG PLT during the Financial Year 2021 are set out in the Audited Financial Statements and AuditCom Report. II. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK The Board acknowledges its responsibility to maintain a sound risk management and internal control system to manage and mitigate significant risks across the Group and to safeguard stakeholders’ interests and the Group’s assets. The Board has established an e!ective risk management and internal control framework within the Group. The Board, through the SRMCom and AuditCom, continually reviews and ensures the adequacy and e!ectiveness of the Group’s risk management and internal control system. The SRMCom, at its quarterly meeting, reviews the implementation of the risk management framework as well as deliberates on the business risks and the mitigating controls to address the risks identified. The Internal Audit function, which reports directly to the AuditCom, is primarily responsible in assessing and improving the e!ectiveness of the risk management, internal control systems and governance processes within the Group. More details on the Internal Audit function and its activities are set out in the AuditCom Report. The AuditCom reviews and assesses the adequacy of the risk management and internal control systems mainly based on reports presented by management, external and internal auditors during its meetings. The Statement on Risk Management and Internal Control provides an overview of the Group’s risk management and internal control framework as well as the adequacy and effectiveness of the framework. 132 CORPORATE GOVERNANCE OVERVI EW STATEMENT