PRG Holdings Berhad Annual Report 2020

ACTIVITIES DURING THE FINANCIAL YEAR (continued) (iv) Risk Management • Reviewed the significant risks identified by the Risk Management Team on quarterly basis and relevant measures and efforts undertaken to mitigate the risks. • Reviewed and recommended the Risk Management Framework of the Group for the Board’s approval. • Reviewed the assessment report on the effectiveness of the risk and internal control processes of the Company and Group and was satisfied that the Group has in place the relevant risk management processes and internal control systems, amongst others, to manage the risks associated with the business and operations of the Group. (v) Others • Reviewed the Statement on Risk Management and Internal Control and the Report of the ARMC for inclusion in the Annual Report. • Reviewed and updated the Terms of Reference of the ARMC to ensure its adequacy for current circumstances, the Company’s policies and/or compliance with applicable rules and regulations. INTERNAL AUDIT FUNCTION The internal audit function for the Manufacturing Division is performed in-house and for the Corporate, Property Development & Construction and Agriculture Divisions, is outsourced to an independent consulting firm, GRC Consulting Services Sdn. Bhd. to provide assurance on the effectiveness as well as the adequacy and integrity of the system of internal control of the Group. Furniweb Holdings Limited (“FHL”), a 54.19%-owned subsidiary of the Company, is the holding company of the subsidiaries operating in the Manufacturing Division. FHL is listed on the GEM of The Stock Exchange of Hong Kong Limited and is subject to the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”). FHL and its subsidiaries in the Manufacturing Division (“FHL Group”) has an in-house internal audit department that carries out regular reviews of the operations and system of internal control by examining and evaluating business processes to determine the adequacy and efficiency of financial and operating controls, and highlighting significant risks and non-compliance impacting the FHL Group to its audit committee. The internal audit report tabled to the audit committee of FHL would be subsequently presented to the ARMC of the Company for notation. For the year under review, internal audit reviews were performed to evaluate and identify any weaknesses of the internal controls affecting the Group, the adequacy of the existing system of internal control and recommend measures to Management to improve and rectify any weaknesses. The internal audit reviews have been carried out based on compliance and risk-based audit approaches and the findings were presented to the ARMC on quarterly basis. PRG HOLDINGS BERHAD Report of The Audit and Risk Management Committee cont’d 54