Paragraph 15.26(b) of the Listing Requirements of Bursa Securities specified that the Board of Directors is to provide a Statement on Risk Management and Internal Control for the Group. The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internal controls to safeguard shareholders' investments and the Group's assets. The Board is pleased to include a statement on the state of the Group's risk management and internal control during the period under review. The statement is prepared in accordance with the Listing Requirements and as guided by the "Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers". Risk Management The function of Risk Management was included under the Audit Committee scope of reference. The Group has established the RMC with the primary responsibility of ensuring the effective functioning of the integrated risk management function within the Destini Group. The RMC will assist the Board to see overall managements of all risks covering industry risk, country risk, strategic risk, financial risk, product risk, internal processes risk, people risk and information technology risks. The RMC will also review and evaluate the adequacy of overall risk management policies and procedures and ensure that there is adequate risk reporting of core business activities. Internal Control The Group's system of internal control includes, among others: 1. A well-defined organisational structure with clear lines of accountability and responsibilities provides a sound framework within the organisation in facilitating check and balance for proper decision making at the appropriate authority levels of management including matters that require the Board's approval. 2. A documented delegation of authority that sets out decisions that need to be taken and the appropriate levels of management involved including matters that require the Board's approval. Risk Management and Internal Control 3. T he Board of Directors and Audit Committee meet at least once on a quarterly basis to review and deliberate on financial reports, annual financial statements, internal audit reports and other relevant matters. Discussions with management were held to deliberate on the required actions to address internal control issues that have been identified. 4. Internal policies and procedures had been established for key business units within the Group. 5. Comprehensive guidelines on employment and retention of employees are in place to ensure that the Group has a team of employees who are qualified and equipped with all the necessary knowledge, skills and abilities to carry out their responsibilities effectively. 6. Scheduled operational and management meetings are held to discuss and review the business plans, budgets, financial and operational performances of the Group. Monthly management accounts containing key financial results, operational performances and comparison of actual performance against budgets are presented to the management team for monitoring and review. The quarterly financial statements are presented to the Audit Committee and Board for their review and approval. The Board also plays an active role in discussing and reviewing the business plans, strategies, performance and risks faced by the Group. The Board of Directors does not regularly review the internal control system of the associates and joint ventures, as the Board of Directors does not have any direct control over their operations. The Group's interests are served through representations on the Boards of the respective associates and joint ventures and the review of their management accounts, and enquiries thereon. These representatives also provide the Board with information and timely decision making on the continuity of the Group's investment based on the performance of the associates and joint ventures. GOVERNANCE 71 ANNUAL REPORT 2022 DESTINI BERHAD
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