Chemical Company of Malaysia Berhad Annual Report 2019

(ii) Audit Planning and Work Done Adopting a risk-based approach after evaluation and assessment of risks at Company and Group level, the Group internal audit function formulated an Annual Audit Plan, which was reviewed and approved by the Audit and Compliance Committee. The scope of the Annual Audit Plan covers all business units and operations of the Company and its subsidiaries. Group Integrity & Assurance Department adopts the COSCO Internal Control Framework in conducting the audit assignments, which covered 5 elements of internal controls, namely: • Control Environment; • Risk Assessment; • Control Activities; • Information and Communication; and • Monitoring. In 2019, the areas under review included: • Procurement; • Sales and Marketing; • Logistics and Distributions; • Operations; and • Human Resource. The Internal Audit reports, which included issues and action plans, were presented to and discussed with the Management. The Group internal audit function subsequently monitored the implementation of the agreed action plans to ensure satisfactory closure of audit issues. The reports together with follow-up action plans and implementation status were then submitted and presented to the Audit and Compliance Committee for their deliberation and subsequent approval. (iii) Internal Audit Resources and Cost All audit assignments conducted in 2019 was carried out by three (3) auditors. All auditors possess accounting background, except one with an Engineering background. The total expenditure incurred for Group Risk, Integrity & Assurance Department for the financial year ended 31 December 2019, which amongst others included departmental expenditures such as office running expenses, training expenses, travelling expenses, staff remuneration, etc. was RM1.137 million. STATEMENT ON GROUP INTEGRITY FUNCTION The Group Integrity Unit (of the Group Risk, Integrity & Assurance Department) reports to the Audit and Compliance Committee on all integrity matters. The Group Integrity Unit is responsible for, amongst others, conducting programmes to further inculcate and enhance integrity in the Group’s culture, managing the CCM Whistleblowing hotline, enhancing business practices to further improve governance. The key activities in 2019 were as follows: i) Conducted Board of Director and Senior Management training entitled “Corporate Liability – The Act, The Defence and The Reality”. ii) Revision of policies relating to Integrity matters, namely the Gifts, Entertainment and Hospitality Policy, and the Whistle Blowing Policy. iii) Conducted integrity roadshows for employees in Klang Valley and Pasir Gudang to raise awareness and educate on all of the Group’s integrity policies. iv) Conducted an Integrity Assessment for all employee to gauge the level of integrity within the Group. BUSINESS OVERVIEW FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE 93 ANNUAL REPORT 2019