2019 UEM Edgenta Annual Report

113 UEM Edgenta Berhad UEM EDGENTA AT A GLANCE MESSAGE FROM OUR LEADERSHIP STRATEGIC FOCUS OPERATIONAL REVIEW SUSTAINABILITY EFFORTS CORPORATE GOVERNANCE INTRODUCTION FINANCIAL REVIEW ADDITIONAL INFORMATION Annual Report 2019 INTERNAL AUDIT FUNCTION Internal Audit Department (“IAD”) is established as an independent appraisal function to assist both the ARC and the Board of Directors in discharging their duties and to provide assurance to the Management and the Board of Directors that all aspects of the operations of the Company are functioning within the acceptable limits and expectations. The IAD carries out the internal audit function of the Group. The Head of the Internal Audit reports functionally to the ARC and administratively to the Managing Director/ Chief Executive Officer of the Company. The information on the resources, objectivity and independence of the Head of Internal Audit and internal auditors are provided in the Corporate Governance Report in accordance with Practice 10.2 of the Malaysian Code on Corporate Governance 2017. The total cost incurred for the internal audit function for financial year ended 31 December 2019 is approximately RM1,516,000.00, comprising mainly salaries, training and traveling expenses for audit assignments. Activities The activities undertaken by IAD are in conformance with the International Professional Practice Framework (“IPPF”) on Internal Auditing issued by the Institute of Internal Auditors (“IIA”). It is the responsibility of the internal audit function to provide the ARC with independent and objective reports on the state of internal control of the various operating entities within the Group, and the extent of compliance of the divisions with the Group’s established policies and procedures as well as relevant statutory requirements. Whenever there was any significant issue, the IAD has it monitored closely and adequately addressed by the Management. The status and closure of audit issues are presented at each planned ARC meeting. The audit plan had also incorporated the Group’s identified risks and focused on those which would have the most impact on the business objectives of the Group. Among the focus areas are safety, health & environment risks, operational risks, financial risks, as well as the order book risks. During the year, IAD had carried out fifteen (15) audit assignments. The IAD had also worked closely with Group Internal Audit (“GIA”) of UEM Group Berhad in audits that require specific skills and knowledge not available within the IAD. Representatives of IAD were invited to and had attended all the planned ARC meetings during the year. The scope of the planned independent audit assignments cover the following:- 1. HQ Audits over Corporate and Support Services 2. Operational audits in Infrastructure Services, Healthcare Support and Property & Facility Solutions 3. Audit on Asset Consultancy EXTERNAL AUDIT D 5. Reviewed and recommended the appointment of the Company’s External Auditors for the provision of non-audit services, for the projects undertaken by the Company after assessing and considering the following:- a) The nature of the non-audit services provided by the external auditors or its affiliates and fees paid for such services relative to the audit fee; b) The scope of work as required are permitted under the Malaysian Institute of Accountants By-Laws; and c) The services should not impair their independence or there are safeguard 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. Corporate Governance Overview Statement