DESTINI Annual Report 2020

In assessing or determining the suitability and independence of the External Auditors, the Audit Committee has taken into consideration of the following: i) t he adequacy of the experience and resources of the External Auditors; ii) t he External Auditor’s ability to meet deadlines in providing services and responding to issues in a timely manner as contemplated in the external audit plan; iii) t he nature of the non-audit services provided by the External Auditors and fees paid for such services relative to the audit fee; and iv) w hether there are safeguards in place to ensure that there is no threat to the objectivity and independence of the audit arising from the provision of non-audit services or tenure of the External Auditors. Annual appointment or re-appointment of the External Auditors is via shareholders’ resolution at the AGM on the recommendation of the Board. The External Auditors are being invited to attend the AGM of the Company to response and reply to the Shareholders’ enquiries on the conduct of the statutory audit and the preparation and contents of the audited financial statement. Where necessary, the Audit Committee will meet with the External Auditors without the presence of Executive Directors and members of management to ensure that the independence and objectivity of the External Auditors are not compromised and matters of concerns expressed by the Audit Committee are duly recorded by the Company Secretaries. In presenting the Audit Planning Memorandum to the Audit Committee, the External Auditors have highlighted their internal policies and procedures with respect to their audit independence and objectivity which include safeguards and procedures and independent policy adopted by the External Auditors. The External Auditors have also provided the required independence declaration to the Audit Committee and the Board for the financial year ended 31 December 2020. The Audit Committee is satisfied with the competence and independence of the External Auditors for the financial year under review. Having regard to this, the Board approved the Audit Committee’s recommendation for the shareholders’ approval to be sought at the AGM on the reappointment of Messrs. UHY as the External Auditors of the Company for the financial year ending 31 December 2021. PART II –RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK 9. RISK MANAGEMENT COMMITTEE (“RMC”) The RMC was established on April 2019 comprising the following members: Chairman Tan Sri Dato’ Sri Rodzali Bin Daud (Independent & Non-Executive Chairman) Members Professor Datin Dr Suzana Binti Sulaiman @ Mohd Suleiman (Independent & Non-Executive Director) Abdul Rahman Bin Mohamed Rejab (Executive Director) The functions of the RMC is to oversee the risk management matters relating to the activities of the Group and assists the Board to fulfil its responsibilities with regard to risk management in order to manage the overall risk exposure of the Group. The RMC is also responsible to oversee the compliance function and monitoring the overall compliance of the Group. Effective Risk Management and Internal Control Framework The Board is entrusted with the overall responsibility of continually maintaining a sound system of internal control, which covers not only financial controls as well as risk management, and the need to review its effectiveness regularly in order to safeguard shareholders’ investments and the Company’s assets. The internal control system is designed to access current and emerging risks, respond appropriate to risks of the Group. As an effort to enhance the system of internal control, the Board together with the assistance of the internal auditors adopted on-going monitoring and review to the existing risk management process in place within the aim of formalising the risk management functions across the Group. This function also acts as a source to assist the Audit Committee and the Board to strengthen and improve current management and operating style in pursuit of best practices. As an ongoing process, significant business risks faced by the Group are identified and evaluated and consideration is given on the potential impact of achieving the business objectives. This includes examining principal business risks in critical areas, assessing the likelihood of material exposures and identifying the measures taken to mitigate, avoid or eliminate these risks. Corporate Governance Overview Statement 66 ANNUAL REPORT 2020 DESTINI BERHAD