2019 UEM Edgenta Annual Report

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