GHL System Berhad Annual Report 2019

A N N U A L R E P O R T 2 0 1 9 59 SUMMARY OF ACTIVITIES DURING FINANCIAL YEAR ENDED 31 DECEMBER 2019 (Cont’d) Internal Audit: (Cont’d) d. Reviewed the status of internal audit plan during each meetings; e. Discussed the major internal audit findings, weaknesses, and significant internal audit matters raised by the GIA. The ARC also sought Management’s commitment for corrective actions as recommended in internal audit reports; and f. Reviewed the status of audit findings in ensuring appropriate actions are implemented timely by the Management, with no audit issues left unaddressed. Recurrent Related Party Transaction: a. Reviewed annually the recurrent related party transactions undertaken by the Group for compliance with the MMLR and the appropriateness of such transactions entered into by the Company and its subsidiaries to avoid potential or actual conflict of interest to ensure the decisions are based on the best interest of the Company and its shareholders. Other activities: a. Reviewed the Statement on Risk Management and Internal Control, Corporate Governance Overview Statement, and Audit and Risk Committee Report prior to the Board’s approval for inclusion in the Annual Report; b. Reviewed the Corporate Governance Report prior to the Board’s approval for submission to Bursa Malaysia; c. Conducted a self-assessment to evaluate the Committee’s overall effectiveness in discharging its responsibilities; d. Verified the allocation of ESS to executives, pursuant to the ESS By-Law 5.2. INTERNAL AUDIT FUNCTION The Group has established an internal audit function as a key component of its internal control appraisal process. The Head of GIA reports independently to the ARC and is guided by a formalised Internal Audit Charter and The Institute of Internal Auditor’s International Professional Practice Framework. The main responsibility of the GIA function is to undertake independent assessments on the adequacy and effectiveness of internal controls pertaining to key areas as follows:- a. Reliability and integrity of financial and operational information; b. Effectiveness and efficiency of operations; c. Safeguarding of assets; and d. Compliance with applicable laws and regulations. In attaining this, the GIA adopts a risk-based approach towards undertaking internal audit reviews for the Group based on an annual internal audit plan approved by the ARC. The GIA has also incorporated a structured internal audit rating methodology that appraises an overall rating of an audit report by a scoring system. The said system provides the Management and the ARC for a consistent and concise assessment of the risks posed by the area or function being reviewed. AUDIT AND RISK COMMITTEE REPORT CONT’D