KPJ Healthcare Berhad - Annual Report 2018

130 KPJ HEALTHCARE BERHAD AUDIT COMMITTEE REPORT TERMS OF REFERENCE The duties and responsibilities of the AC is outlined in its Terms of Reference (TOR) which is available online in the Corporate Governance section at https://kpj.listedcompany.com/audit_ committee.html The TOR has excluded the duties and responsibilities on Risk Management as this function was transferred to the newly established Risk and Sustainability Committee (RSC) effective 23 April 2018. FOCUS AND ACTION PLAN The AC received updates on key governance matters and issues across the Group at each Committee meeting. Areas of the AC’s focus during the Financial Year include: • Financial statements compliant with the Malaysian Financial Reporting Standards (MFRS) Framework. The preliminary financial impact of the first adoption of new MFRS has been assessed accordingly as the effects of the adoption are required to be applied retrospectively. • Reduction of Goods and Services Tax (GST) rate to zero percent and implementation of Sales & Services Tax (SST). • Revised Tax Audit Framework released by the Inland Revenue Board (IRB) on 1 April 2018 with key changes on audit notification and deadlines for document submission and audit settlement period. • Recent development in tax laws and regulations. SUMMARY OF WORK During the year 2018, the Committee carried out the following work: • Financial results - Reviewed the quarterly unaudited financial result announcements before recommending the same to the Board for approval; - Reviewed the Company’s compliance, in particular the quarterly and year-end financial statements, with Malaysian Financial Reporting Standards, applicable disclosure provisions in the MMLR, and other relevant legal and regulatory requirements; and - Reviewed the impacts of any changes in accounting policies and adoption of new accounting standards together with significant matters highlighted in the financial statements. • Risk Management - Reviewed the system in place to identify, assess, mitigate and monitor Group-Wide Risk Assessment to promote and improve risk management awareness and processes; and - Reviewed the risk profile of the Group and major initiatives having significant impact on the business. Effective 23 April 2018, the above function was no longer carried out by the AC as Risk and Sustainability Committee has assumed this role. • Internal Audit - Reviewed and approved the annual audit plan for the year 2017/2018 to ensure adequate resources, competencies as well as comprehensive audit scope and coverage over the significant and high risk audit activities; - Deliberated on the Internal Audit Reports that were tabled and appraised the adequacy of Management’s responsiveness to the audit findings and recommendations; - Evaluated the results of scheduled follow-ups, investigations and special audits performed and confirmed the appropriate actions were taken to correct the weaknesses; - Assessed the status of audit activities as compared to the approved annual audit plan; and - Revised the Audit Charter to include the updates on the requirement of International Professional Practice Framework (IPPF) from the Institute of Internal Auditor (IIA). • External Audit - Reviewed the audit plan, audit strategy and scope of work for the year; - Reviewed the results of the interim and annual audit, audit reports, Management Letter together with Management’s response to their findings and “Key Audit Matters”; - Assessed the independence and objectivity of the external auditors during the year and prior to appointment of the external auditors for adhoc non-audit services. The Committee also received from the external auditors their policies and written confirmation regarding their independence and the measures used to control the quality of their work; - Deliberated on the updated development in Financial