INTERNAL AUDIT FUNCTION The Group has established its own IAD to provide independent and objective assurance to the AC and the Board that the established internal controls, risk management, and governance processes are adequate and operating effectively and efficiently as well as complied with the relevant internal rules and regulations. The IAD activities and practices are closely guided by the International Professional Practice Framework (“IPPF”) on Internal Auditing issued by the Institute of Internal Auditors (“IIA”). The information on the resources, objectivity, and independence of the internal auditors are provided in the Corporate Governance Report in accordance with Practice 11.2 of the revised Malaysian Code on Corporate Governance issued by the Securities Commission Malaysia in 2021. The AC reviews and approves the IAD’s manpower requirements to ensure the function is adequately resourced with competent and proficient internal auditors. During the year, the search for a new Head of Internal Audit has been initiated and is ongoing. As an interim measure, the Head of Risk, Integrity and Compliance is double hatting as the Acting Head of Internal Audit, in view of the focus on risk-based audit plan/reviews. The total cost incurred for the internal audit function for financial year ended 31 December 2022 is approximately RM1,427,000, comprising mainly salaries, training, and traveling expenses for audit assignments. SUMMARY OF ACTIVITIES The IAD implements a risk-based audit methodology in establishing its annual audit plan. The audit plan 2022 which was approved by the AC on 19 November 2021, had considered the Group’s identified risks and focused on auditable areas where the risks would have the most impact on the business objectives of the Group. Among the focus areas are revenue concentration risks, litigation risks, cybersecurity risks, business strategy execution risks, information security risks, project execution risks, overseas business expansion risks, and sustainability risks. The scope of the planned audit assignments for the financial year 2022 covered the following:- 1. O perational audits in Healthcare Support, Infrastructure Services, Asset Consultancy, and overseas operations. 2. Audit on Information Technology, Cybersecurity and Support Services. 3. Quarterly review on Related Party Transactions/Recurrent Related Party Transactions. During the year, AC had reviewed and deliberated on a total of ten (10) internal audit reports in relation to the audits carried out, together with the audit recommendations made by IAD and the Management Responses to those recommendations. Representatives of IAD attended all the planned AC meetings during the year to brief the AC on audit results and significant matters raised in the detailed IAD reports. The Heads of Divisions, where required, were also invited to the AC Meeting to provide further explanations on the audit observations highlighted. Where appropriate, the AC directed Management to rectify and improve control and workflow procedures. The AC, at all its quarterly meetings, also reviewed the implementation status of the corrective actions arising from the audit recommendations to ensure that the key risks and control lapses were addressed in a timely manner. AUDIT COMMITTEE REPORT In accordance with the practise set out in the revised Malaysian Code on Corporate Governance issued in April 2021, a listed company should establish an effective risk management and internal control framework. The Board of Directors (“Board”) is pleased to provide this Statement on Risk Management and Internal Control pursuant to Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and as guided by The Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL RESPONSIBILITY AND ACCOUNTABILITY The Board affirms its commitment and responsibility in maintaining a sound and effective system of risk management and internal control in safeguarding shareholders’ interests and the Group’s assets. The Board is constantly and actively identifying the Group’s level of risk tolerance, assessing and monitoring the key business risks. The risk management and internal control system adopted by the Group are reviewed and updated periodically to align with the dynamic changes in the business operating environment as well as changes in regulatory requirements. The Board acknowledges that the risk management and internal control system are designed to manage and reduce the risk of not achieving business objectives and can only provide reasonable and not absolute assurance of effectiveness against material misstatement of management and financial information and records, financial losses or fraud or any occurrences of unforeseeable circumstances. For the financial year under review, there are nine (9) Directors on the Board comprising one (1) Managing Director/Chief Executive Officer (“MD/ CEO”), five (5) Independent NonExecutive Directors and three (3) NonIndependent Non-Executive Directors. The Board is supported by a number of established Committees, namely the Audit Committee (“AC”), Board Governance and Risk Committee (“BGRC”), Nomination and Remuneration Committee (“NRC”), Board Tender Committee (“BTC”) and Board Investment Committee (“BIC”) which examine all matters within its scope and responsibilities, and report to the Board with its recommendations for the Board’s decision. The responsibilities and functions of the Board, each of its committees and the individual directors are specified in its respective Terms of Reference and Board Charter. The General Management Committee (“GMC”) is chaired by the Managing Director/Chief Executive Officer and comprises the Chief Financial Officer, Chief Strategy Officer, Chief People Officer, Chief Digital Officer and management team members from the respective business divisions and corporate support services. The key roles of the GMC are to drive strategic execution, deliberate and resolve the Group’s key strategic and operational issues in a timely manner and keep track of key business developments. The GMC also serves as a platform to monitor the Group’s strategic direction and for members to report on their respective business and operation plans to the Managing Director/Chief Executive Officer, highlight issues and devise solutions/ corrective plans, as well as address other matters as directed by the Board and/or the Managing Director/Chief Executive Officer. Responsibility of the Board Board and Board Committees General Management Committee p.236 p.237 UEM EDGENTA BERHAD INTEGRATED ANNUAL REPORT 2022 1 2 3 4 5 6 7 8 9 GOVERNANCE
RkJQdWJsaXNoZXIy NDgzMzc=