Annual Report 2020

• Heads of Business Units present their strategies, annual budgets and capital expenditure proposals to the Executive Committee and the Board for deliberation and approval. • The review of strategy and annual budget is undertaken by Management on half-yearly basis. INTERNAL AUDIT Internal audit function was carried out by an independent professional consulting firm. Scheduled internal audits are carried out based on audit plan approved by the Audit Committee. The internal audit reports, summarising the observations of control weaknesses, recommendations for improvement and Management responses were presented to the Audit Committee on a quarterly basis. These findings were deliberated together with Management at the Audit Committee Meetings. The Audit Committee assessed the overall adequacy and effectiveness of the system of internal controls of the Group and reports to the Board of Directors, in particular, the matters relating to significant risks and the necessary recommendations for changes. For the financial year under review, the internal audit’s scope covered the following based on the approved audit plan: • Revenue control management, which involved assessing the adequacy of controls over sales management, price setting, and credit control management. • Cost control management, which involved assessing the adequacy of controls over procurement, inventory management, and asset management. • Operational and compliance control management, which involved assessing the adequacy of controls over information technology, halal compliance, warehouse control, and retail operations. CONCLUSION The Board is of the view that the risk management and internal control systems that are in place for the year under review and up to the date of approval of this statement, is adequate and effective to safeguard shareholders' investment and the Group's assets. There have been no significant breakdowns or weaknesses in the system of internal control of the Group for the financial year under review. The Group continues to take the necessary measures to ensure that the system of internal control is in place and functioning effectively. The Group's system of internal control applies to QL Resources Berhad and its subsidiaries. Associated companies have been excluded because the Group does not have full management and control over them. However, the Group's interest is served through representations on the boards of the respective Associated companies. This Statement on Risk Management and Internal Control was approved by the Board on 4 August 2020. Annual Report | 2020 QL Resources Berhad 90 Statement on Risk Management and Internal Control