MKH Annual Report 2017

The Internal Audit Function And Its Role (continued) The principal role of the internal audit function is to undertake, on a prioritised approach, an independent and systematic assessment of the Group’s system of risk management and internal controls as established by management in addressing the principal business risks faced by the Group. In conducting internal audit of the Group, the internal audit function deployed professional standards promulgated by the IIA Malaysia. During the financial year under review, weaknesses noted in the said system and areas that required improvement, including the recommendations thereof and action plans agreed to be deployed by management to address the issues raised, were highlighted by the internal audit function by way of internal audit reports issued to the Audit Committee. (a) Internal Audit Work Carried Out During The Financial Year Under Review The internal audit function conducted its work based on an annual internal audit plan which was tabled before, and approved by, the Audit Committee. The main activities of work carried out by the internal audit function are set out below: (i) Conduct Of internal Audit The internal audit function adopted a risk-based approach in identifying specific areas and processes to be covered. During the financial year under review, the internal audit function focused on selected key processes of the Group’s as follows:- Entity Key Processes PT Maju Kalimantan Hadapan • Estates – harvesting practices, field practices, store management, employment & checkroll, fixed asset management and expenses management • Main office - purchasing and human resources management • Mill - production, store management, oil losses analysis, crude palm oil & palm kernel dispatch, and jetty management PT Sawit Prima Sakti • Estates – harvesting practices, field practices, store management, employment & checkroll, fixed asset management and expenses management Aliran Perkasa Sdn Bhd • Project management Kajang Resources Corporation Sdn Bhd • Quality Hillpark Resources Sdn Bhd • Revenue management Srijang Kemajuan Sdn Bhd Head Office (Sales & Marketing) • Sales commission improvement • Buyer get buyer scheme • Introducer scheme MKH Building Materials Sdn Bhd • Procurement • Sales & receivables Maha Usaha Sdn Bhd • Revenue management - Plaza Metro Kajang • Expenses management • Business licenses review Srijang Indah Sdn Bhd • Revenue management - Metro Point Complex • Expenses management • Business licenses review 64 MKH Berhad • Annual Report 2017 Audit Committee Report