Page 96 - MSM_AR2020

CHAIRMAN’S DELIVERING MSM MANAGEMENT DISCUSSION GROUP FINANCIAL
STATEMENT VALUE OVERVIEW & ANALYSIS REPORT

AuDIT, GOVERNANCE AND RISk COMMITTEE REPORT

• Reviewed the significant matters highlighted by the • Assessed the adequacy of resources of the internal
external auditors in the financial statements and audit function to execute the MSM Group Annual
significant judgment made by Management. Internal Audit Plan after taking into consideration the
number of planned assignments and competencies
• Reviewed matters related to loan facilities of MSM required.
Malaysia Holdings Berhad (“MSM”) before
recommending to the Board for approval. • Presented and reviewed quarterly reports summarising
the following at every quarterly meeting during the
• Reviewed the Group’s Consolidated Cashflow Projections. financial year 2020:

• Reviewed the status of construction of the Johor • The observations from the internal audit reports
94 Refinery and position on the financial covenants. issued during the quarter. The Committee gave
direction to the Management on key matters
• Reviewed the proposed rental arrangement between
MSM MALAYSIA HOLDINGS BERHAD Annual Report 2020
MSM Perlis Sdn Bhd and FGV Integrated Farming requiring the Management’s special and
immediate attention. The Committee has reported
Holdings Sdn Bhd.
to the Board on these key significant matters.
• Reviewed the closure of MSM Perlis Sdn Bhd’s factory • The progress of implementation of the
operation.
recommendations from internal audit reports issued.
Assessing the Risks and Control Environment
• The progress of implementation of the MSM Group
• Evaluated the reports on the assessment of the Annual Internal Audit Plan.
risks and control environment based on the external
auditor’s quarterly financial statement reviews and • Considered outcome of any special reviews and
investigations, including those arising from Management
statutory financial audits at each Committee meeting.
and recommendation raised by the Committee’s
• Reviewed all internal audit reports issued by the Group Chairman and members and Management’s response
Internal Audit which detailed the observations from and follow-up actions thereto, and reported key
all the internal audits undertaken. matters to the Board.
• Received assurances from the GCEO and CFO that • Assessed the performance of the Chief Internal
the risk management and internal control system Auditor basing on the delivery of the internal audit
of the Group for the financial year 2020 have been function. This include assessment whether the
operating adequately and effectively, in all material internal audit function has the required expertise and
respects. professionalism in discharge its duties.

• Monitored the implementation of corrective actions Reviewing the External Audit Process
taken by Management. Management provided
justification and improvement for the key matters • Held two (2) private discussion sessions with the
highlighted by internal and external auditors. external auditor, Messrs PricewaterhouseCoopers PLT
(“PwC”) without Management on 13 February 2020
• Provided relevant guidance for the improvement of the and 11 August 2020.
risks and internal control of the Group, in particular in In these sessions, the matters discussed include the
the areas of inventory management which was the following:
key focus area of the Group during the financial year.
This included improvements in the monitoring and (i) The performance of the finance function.
systems.
(ii) The impact of transfer of MSM Perlis’s refinery
Internal Audit Process operation to Johor and closure of the MSM
Perlis’s Refinery.
• Reviewed and approved MSM Group Annual Internal
Audit Plan for the year 2021 by assessing the priority
ranking of the audit universe to provide sufficient audit
coverage.