AwanBiru Technology Berhad - Annual Report 2021

Statement on Risk Management and Internal Control CONTROL STRUCTURE & RISK MANAGEMENT FRAMEWORK The day to day operations of the Group and the Company is overseen by the President/GCEO with the assistance of the COO. This control is exercised through Senior Management in respect of commercial, financial, and operational aspects of the Group and the Company. The President/GCEO, COO and Senior Management meet regularly to deliberate on such matters. Internal control is a process, enforced by the Board and the Management of the Group and the Company. It is designed to provide reasonable assurance regarding the achievement of the Group’s objectives and to safeguard shareholders’ investment and assets. Although it is impossible to provide complete assurance through any control system, the control systems must be designed and applied to manage the likelihood and impact of risk to acceptable levels. The Group adopts Risks Management Framework with an internal control system that is principally aligned with the Committee of Sponsoring Organizations of the Treadway Commission (COSO) “Internal Control - Integrated Framework model”. Risks identified are evaluated by examining the potential impact on the Group if a risk crystallized as well as the likelihood of occurrence. The risk level is rated as low, medium or high accordingly. The Board fully supports the contents of the SORMIC and through the Audit Committee continually reviews the adequacy and effectiveness of the risk management processes in place within the various operating units with the aim of strengthening the risk management functions across the Group and the Company. Management also acknowledges its responsibility for the management of risks, for developing, operating and monitoring the system of internal controls and for providing assurance to the Board that it has done so in accordance with the policies adopted by the Board. Further assurance is provided by the Internal Audit function which operates across the Group with emphasis on key operating units within the Group. Acknowledging the need for an effective and independent Internal Audit function as an integral part of the control structure and risk management framework of the Group and the Company, the decision was taken to outsource the Internal Audit activities to a third-party service provider. INTERNAL AUDIT FUNCTION In desiring to maintain total independence in the management of the risk and internal control environment, the Company appointed KPMG Management & Risk Consulting Sdn. Bhd. (“ KPMG MRC ”) to manage the Company’s internal audit function on an outsourced basis. The fees incurred for the outsourced internal audit function for the financial year ended 30 June 2021 were RM37,000 excluding Sales and Service Tax and out-of-pocket expenses. The internal audit engagement by KPMG MRC is headed by an Executive Director, namely Mr. Mohd Khaidzir Shahari (“ Mr. Khaidzir ”). Mr. Khaidzir is a Chartered Accountant with professional membership in the Association of Certified Management Accountant, The Institute of Internal Audit of Malaysia and Malaysian Institute of Accountants. Mr. Khaidzir has accumulated over twenty-five (25) years of experience in a wide range of governance advisory, risk, and internal audit services. There were a total of three (3) personnel deployed by KPMG MRC for the internal audit work of financial year ended 30 June 2021. All the personnel deployed by KPMG MRC are free from any relationships or conflicts of interest, which could impair their objectivity and independence during the course of the work. Awantec | Transparency Annual Report 2021 116