INTERNAL CONTROL The Group’s internal control system comprises policies, procedures, processes and organisational structures designed to provide reasonable assurance over the achievement of its business objectives, safeguarding of assets, reliability of financial reporting and compliance with applicable laws, regulations and internal policies. Key elements of the Group’s internal control system include the following: 1. Receivables, Contract Assets and Credit Risk Controls are established to monitor receivable ageing and collections, assess customer creditworthiness, review ECL provisions, and evaluate the recoverability of significant receivables and contract assets. Contract assets and revenue recognition are subject to appropriate controls over contract certification, milestone completion, supporting documentation and billing. Customer concentration risk is periodically assessed, with appropriate monitoring and mitigation measures implemented where significant exposures are identified. 2. Legal and Litigation Matters Legal and litigation matters are monitored by management, with significant claims and potential exposures assessed in consultation with the relevant legal advisers. Material developments, financial implications, provisions and disclosure requirements are reported to the Board and / or relevant Board Committee. 3. Intercompany Balances and Subsidiary Funding Intercompany balances and funding arrangements are subject to appropriate authorisation, reconciliation and monitoring controls. Management periodically assesses the financial position and recoverability of amounts due from subsidiaries, including potential impairment risks, and takes appropriate action where required. 4. Organisational structure and accountability A well-defined organisational structure with clear reporting lines, roles, responsibilities and accountabilities is established across the Group. This provides an appropriate framework for effective oversight, segregation of duties, checks and balances, and decision-making at the appropriate levels of authority, including matters requiring Board approval. 5. Delegation of Authority A documented delegation of authority framework sets out the respective levels of authority and approval limits for key business and operational decisions, including matters requiring the approval of the Board. 6. Board and Audit Committee oversight The Board and AC meet at least quarterly to review and deliberate on matters including the Group’s quarterly financial results and the audited financial statements, internal audit reports and other significant financial, operational and control matters. Where internal control issues are identified, Management is required to consider and implement appropriate remedial actions. 7. Policies and procedures Appropriate internal policies, procedures and guidelines have been established for key business and support functions across the Group to promote consistency, accountability and effective control over operations. 8. Human capital and competency Guidelines relating to the recruitment, employment, development and retention of employees are in place to support the Group in maintaining a competent workforce with the requisite knowledge, skills and capabilities to discharge their responsibilities effectively. GOVERNANCE DESTINI BERHAD 101 ANNUAL REPORT 2026
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