GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT The AC is responsible for reviewing the audit, recurring audit-related and non-audit services provided by the External Auditors. The AC has been explicitly accorded the power to communicate directly with both the External Auditors and Internal Auditors. The terms of engagement for services provided by the External Auditors are reviewed by the AC prior to submission to the Board for approval. The effectiveness and performance of the External Auditors are reviewed annually by the AC. In assessing or determining the suitability and independence of the External Auditors, the AC has taken into consideration of the following: i) the adequacy of the experience and resources of the External Auditors; ii) the External Auditor’s ability to meet deadlines in providing services and responding to issues in a timely manner as contemplated in the external audit plan; iii) the nature of the non-audit services provided by the External Auditors and fees paid for such services relative to the audit fee; and iv) whether there are safeguards in place to ensure that there is no threat to the objectivity and independence of the audit arising from the provision of non-audit services or tenure of the External Auditors. Annual appointment or re-appointment of the External Auditors is via shareholders’ resolution at the AGM on the recommendation of the Board. The External Auditors are being invited to attend the AGM of the Company to respond and reply to the Shareholders’ enquiries on the conduct of the statutory audit and the preparation and contents of the audited financial statement. Where necessary, the AC will meet with the External Auditors without the presence of Executive Directors and members of management to ensure that the independence and objectivity of the External Auditors are not compromised and matters of concerns expressed by the AC are duly recorded by the Company Secretaries. In presenting the Audit Planning Memorandum to the Audit Committee, the External Auditors have highlighted their internal policies and procedures with respect to their audit independence and objectivity which include safeguards and procedures, and independent policy adopted by the External Auditors. The External Auditors have also provided the required independence declaration to the AC and the Board for the financial year ended 30 June 2025. The AC is satisfied with the competence and independence of the External Auditors for the financial year under review. Having regard to this, the Board approved the AC’s recommendation for the shareholders’ approval to be sought at the AGM on the reappointment of Messrs. UHY Malaysia PLT as the External Auditors of the Company for the financial year ending 30 June 2026. PART II - RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK 9. RISK MANAGEMENT COMMITTEE (“RMC”) The RMC was established in April 2019, the present members of the RMC are as follows: Chairman Encik Syed Jabed Islam (Independent & Non-Executive Director) Member Dato’ Bahudin Bin Mansor (Independent & Non-Executive Director) Encik Ismail Bin Mustaffa (Executive Director) The function of the RMC is to oversee the risk management matters relating to the activities of the Group and assist the Board to fulfil its responsibilities with regard to risk management in order to manage the overall risk exposure of the Group. The RMC is also responsible to oversee the compliance function and monitoring the overall compliance of the Group. Effective Risk Management and Internal Control Framework The Board is entrusted with the overall responsibility of continually maintaining a sound system of internal control, which covers not only financial controls as well as risk management, and the need to review its effectiveness regularly in order to safeguard shareholders’ investments and the Company’s assets. The internal control system is designed to access current and emerging risks, respond appropriate to risks of the Group. DESTINI BERHAD ANNUAL REPORT 2025 70
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