ANNUAL REPORT 2021 137 GOVERNANCE INTERNAL AUDIT FUNCTION The Group has appointed an outsourced internal audit service provider, namely Vaersa, to carry out the internal audit function apart from our in-house internal audit team. Vaersa discharges its independent assessment of the effectiveness and adequacy of the Group’s system of internal control. This provides the AC and Board with a reasonable assurance of adequacy of the scope, functions and resources of the internal audit function and internal control. The assessment of the adequacy and effectiveness of the internal controls established by the Management in mitigating risks is conducted regularly through interviews and discussions with key management staff, review of the relevant established policies and procedures, and authority limits and observing and testing of the internal controls on a sample basis. The results of the internal audit reviews including action plans to be taken by the Management to address the identified weaknesses and recommendation of enhancement opportunities are then reported to the AC, which in turn reports these matters to the Board. During the FY2021, internal audit works were carried out in accordance with the risk based on internal audit plan which has been reviewed and approved by the AC. The business processes audit reviews were on Finance Department (sales), Human Resources Department, Industrial Relation Department, Myassist Operations review, and Information Technology Department. The results of the audit reviews were discussed with Senior Management and subsequently, the audit findings, including the recommendations for improvement were reported to the AC at the quarterly meetings. Based on the internal audit reviews conducted, none of the weaknesses noted have resulted in any material losses, contingencies or uncertainties that would require separate disclosure in this report. The total costs incurred for the internal audit function for FY2021 was approximately RM30,000. Vaersa had met with AC on 28 May 2021, 23 August 2021, and 29 November 2021 with as well as without the presence of executive board members and the Management to discuss 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 of the Group by the AC and the Board. ii. Clearly defined and structured lines of reporting and responsibility. iii. Operations review meetings are held to monitor the progress of business operations, deliberate significant issues and formulate corrective measures. iv. Documented internal policies as set out in a series of memorandums to various departments within the Group. v. Whistle Blowing Policy which provides an avenue for employees to report suspected malpractices, misconduct or violations of the Company’s policies and regulations in a secured and confidential manner. ASSURANCE The Group Managing Director and Chief Financial Officer have provided assurance to the Board on the adequacy and effectiveness of the Group’s risk management and internal controls, in all material aspects. Taking into consideration the assurance from the Management and relevant assurance providers, the Board is of the view that the risk management and internal control practices and processes are operating adequately and effectively to safeguard the shareholders’ investment, customer’s interests, and Group’s assets. RISK MANAGEMENT AND INTERNAL CONTROL STATEMENT (CONT’D)
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