Serba Dinamik Annual Report 2021

Section 7 | Corporate Governance 246 Risk Management RPT & RRPT Annual Reporting Anti-Corruption Compliance Programme Solvency Assessment ACTIVITIES DELIBERATION • ARC reviewed and deliberated on the revisions made to the Internal Audit Charter and recommended the same to the Board for approval. • ARC reviews and monitors the IA’s performance, progress of achievement of approved annual audit plan and adequacy of audit coverage on a quarterly basis. • ARC also reviewed and approved the action plans to address the competency gaps and audit methodology of the IA Function. • ARC also monitored the progress of the corrective actions taken by Management to ensure appropriate remedial actions were taken on a timely basis to address all key areas of risk and control issues. The Internal Audit Function had reviewed the compliance with policies, procedures and standards, relevant external rules and regulations, as well as assessed the adequacy and effectiveness of the Group’s system of internal control. Areas audited by the Internal Audit Function included audits on the various subsidiaries covering each division in the Group. Internal Audit reports were issued to the ARC regularly and tabled in the ARC meetings. The report incorporated audit recommendations and Management’s responses with regards to any audit finding on the weaknesses in the systems and controls of the operations. The Internal Audit Function also follow up with the Management on the implementation of the agreed audit recommendations and, if necessary, follow up audit will be carried out and reported to the ARC. For the financial year under review, the ARC noted that there was no significant disagreement between the Internal Audit Function and the Management. The Committee is supported by the Internal Audit Function in the discharge of its duties and responsibilities. The ARC reviewed the Group Risk Register on a bi-yearly basis and also deliberated on the risk exposures and the proposed mitigation plans, and reported to the Board. • Reviewed and discussed reports on RPT & RRPT and possible conflict of interest transactions to ensure that all RPT and RRPT were undertaken on arm’s length basis and on normal commercial terms, consistent with the Group’s usual business practices and policies, which are not more favourable than those generally available to the public and other suppliers and are not detrimental to the minority shareholders. • Monitored the threshold of the RPT and RRPT to ensure compliance with the MMLR. • Reviewed and recommended to the Board for approval, the Circular to Shareholders in relation to the proposed renewal of shareholders’ mandate for the Group and its subsidiaries to enter into RRPT of the revenue or trading nature with related parties. ARC has reviewed and endorsed the Corporate Governance Overview Statement, ARC Report and Statement on Risk Management and Internal Control for the Board’s approval and inclusion in the Annual Report 2021. ARC is responsible for overseeing the implementation and assess the effectiveness of procedures and policies that are in place are adequate as guided by the Guidelines on Adequate Procedures issued pursuant to Section 17A (5) of the Malaysian Anti- Corruption Commission Act 2009 (2018). The ARC reviewed the solvency test undertaken by the Management which indicated that the Group is able to satisfy its debts within 12 months from the date of disbursement of dividend to ensure that the Group is solvent pursuant to Section 132(3) of the Companies Act 2016. AUDIT & RISK COMMITTEE REPORT