Kimlun Corporation Berhad Annual Report 2020

(d) Reviewed the results of follow-up audits conducted by the internal auditors on the Management’s implementation of audit recommendations to ensure that all key risks and internal control weaknesses are properly addressed. (4) Related Party Transactions (a) Reviewed related party transactions (“RPTs”) on a quarterly basis and also the internal audit report on RPTs to ascertain that the review procedures established to monitor the RPTs have been complied with. The Management presented the RPTs reports detailing the parties to the RPTs, the nature and quantum of the RPTs to the AC quarterly for their review; (b) Reviewed the 2020 Circular to Shareholders in relation to the renewal of shareholders’ mandate for Recurrent RPT, prior to its recommendation to the Board of Directors for approval. (5) Annual Report and Corporate Governance (a) Reviewed the application of corporate governance principles and the extent of the Group’s compliance with the best practices set out under the Malaysian Code on Corporate Governance 2017 (“MCCG 2017”). In discharging its duty, the AC obtained the advice of the Company Secretary on MCCG 2017, and discussed with the Executive Directors on the application of the best practices set out under the MCCG 2017; (b) Rev i ewed the fol lowing s tat ement s/ repor t s and recommended the same to the Board for inclusion in the Annual Report: (i) Sustainability Statement; (ii) Corporate Governance Overview Statement; (iii) Corporate Governance Report; (iv) Statement on Risk Management and Internal Control; and (v) Audit Committee Report. (6) Risk Management Discussed with the Board of Directors, the material key risks affecting the Group, the mitigation plans and strategies implemented by Management and the residual risk scores of these risks. AUDIT COMMITTEE REPORT SUMMARY OF ACTIVITIES OF INTERNAL AUDIT FUNCTION The Company has outsourced its internal audit function to Tricor Axcelasia Sdn. Bhd. (the succeeding company of NGL Tricor Governance Sdn Bhd), a professional services firm. The internal audit function has been mandated to continually assess and monitor the Group’s system of internal control. During the financial year, the internal auditors carried out internal audit reviews to assess the adequacy and integrity of the system of internal control as established by the Management, so as to provide reasonable assurance that:- t UIF TZTUFN PG JOUFSOBM DPOUSPM DPOUJOVFT UP PQFSBUF TBUJTGBDUPSJMZ and effectively; t BTTFUT BOE SFTPVSDFT BSF TBGFHVBSEFE t JOUFHSJUZ PG SFDPSET BOE JOGPSNBUJPO JT QSPUFDUFE t JOUFSOBM QPMJDJFT QSPDFEVSFT BOE TUBOEBSET BSF BEIFSFE UP BOE t BQQMJDBCMF SVMFT BOE SFHVMBUJPOT BSF DPNQMJFE XJUI The scope of work, as approved by the AC, was essentially based on the risk profiles of individual business units in the Group, where areas of higher risk were included for internal audit. The internal audit covered key operational, financial and compliance controls, including the risk management process deployed by Management. Among the scope of coverage during the financial year were human resource management, facilities management, related party transactions and safety and health function. The internal audit reports (“IA Reports) with details on audit scope and methodology, process flow, critical process risks and relevant control activities, audit findings, areas of concern that require improvements, and audit recommendations were presented to the AC for its review and deliberation. The results of the audits in the IA Reports and the recommended corrective actions on reported weaknesses to be undertaken by the relevant Management team members within the required timeframes would be discussed at the Board meetings. The IA Reports were also forwarded to the Management for the necessary corrective actions. The internal auditors also conducted follow-up audits on key engagements to ensure that the corrective actions were implemented appropriately. This statement is made in accordance with the resolution of the Board of Directors dated 29 April 2021. Kimlun Corporation Berhad Registration No. 200901023978 (867077-X) 051