INTERNAL AUDIT FUNCTION The Group has enlisted the services of Vaersa, an outsourced internal audit service provider, to complement our in-house internal audit team in carrying out internal audit functions. Vaersa’s engagement ensures an independent assessment of the effectiveness and adequacy of the Group’s internal control system. This dual approach provides the RMC, AC, and Board with reasonable assurance regarding the adequacy of the internal audit function’s scope, operations, and resources, as well as the effectiveness of internal controls. Regular assessment of the adequacy and effectiveness of internal controls established by Management to mitigate risks are conducted through a series of comprehensive measures. This includes interviews and discussions with key management staff, thorough reviews of established policies, procedures, and authority limits, as well as observation and testing of the internal controls on a sample basis. The results of these internal audit reviews, along with action plans highlighted to Management to address identified weaknesses and recommendations for enhancement opportunities, are reported to the AC. Subsequently, the AC provides a detailed report to the Board. During the FY2023, internal audit works were conducted in accordance with the risk assessment outlined in the internal audit plan. Which was reviewed and approved by the AC. The scope of business processes audit reviews included Telemarketing Department, Human Resources Department, Operation Management (ESC), Operations Department (Logistic) and Management of Information System. Following the completion of audit reviews, the findings were discussed with Senior Management. Subsequently, the audit findings, along with recommendations for improvement were reported to the AC during quarterly meetings. Based on the internal audit reviews conducted, no significant weaknesses were identified that resulted in material losses, contingencies, or uncertainties that necessitating separate disclosure in this report. The total costs incurred for the internal audit function for FY2023 was approximately RM30,000. Vaersa engaged in discussion with the AC on 27 February 2023, 30 May 2023, 21 August 2023, and 20 November 2023. These meetings were conducted both with and without the presence of executive Board members and Senior Management to address audit related matters. OTHER KEY ELEMENTS OF INTERNAL CONTROLS The other key elements of the Group’s internal control systems are: i. Quarterly review of the financial performance: The AC and the Board conduct quarterly reviews of the Group’s financial performance to ensure transparency, accuracy, and alignment with strategic objectives. ii. Clearly defined reporting and responsibility structures: The Group maintains clearly defined and structured lines of reporting and responsibility, ensuring accountability and effective communication throughout the organisation. iii. Operations review meetings: Regular operations review meetings are convened to monitor the progress of business operations, discuss significant issues, and formulate corrective measures in a timely manner. iv. Documented internal policies: Internal policies are documented and disseminated to various departments within the Group through a series of memorandums, providing clear guidance on operational procedures and compliance requirements. v. Whistle Blowing Policy: The Group has established a Whistleblowing Policy, providing employees with a secure and confidential avenue to report suspected malpractices, misconduct, or violations of company policies and regulations, thereby promoting a culture of transparency and accountability. RISK MANAGEMENT AND INTERNAL CONTROL STATEMENT (cont’d) ANNUAL REPORT 2023 155 GOVERNANCE
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