9. Operational and management monitoring Regular operational and management meetings are conducted to review business plans, budgets and financial and operational performance. Monthly management accounts, including key financial and operational indicators and comparisons of actual performance against approved budgets, are presented to Management for monitoring and review. Quarterly financial statements are presented to the AC and Board for review and approval. The Board also actively reviews the Group’s business plans, strategies, performance and key risks affecting the Group. 10. Trade receivables and expected credit losses Credit assessments are performed on new and existing customers before contracts are entered into or credit terms extended. Trade receivable ageing reports are reviewed monthly by Management, with collection status and overdue balances escalated to the Chief Financial Officer. The ECL assessment on trade receivables and contract assets is reviewed by Management each quarter and presented to the AC for deliberation, having regard to ageing, historical loss experience, customer-specific circumstances and forward-looking information. 11. Contract assets and revenue recognition Revenue on contracts is recognised based on certified work done or documented milestone evidence, which is verified by project and finance personnel prior to billing. Contract asset ageing and unbilled balances are reviewed monthly, and the recoverability of long-outstanding contract assets is assessed by Management and reported to the AC on a quarterly basis. 12. Customer concentration The Group’s revenue is derived from a limited number of major customers, including government-related contracts. Management monitors the Group’s exposure to major customers, contract renewal and tender pipelines and payment performance, and reports on customer concentration and diversification initiatives to the Board. 13. Legal and litigation matters Significant claims, disputes and litigation involving Group companies are tracked in a litigation register maintained by Management with input from external legal counsel. The status of significant matters, including the assessment of potential financial exposure and provisions required, is reported to the AC and Board. 14. Intercompany balances and subsidiary funding Funding advanced to subsidiaries is subject to approval in accordance with the delegation of authority framework. Intercompany balances are reconciled monthly and the recoverability of amounts due from subsidiaries is assessed by Management with reference to the subsidiaries’ financial position and cash flow projections, with significant exposures reported to the AC. CORRECTIVE ACTIONS The Board has taken lessons into consideration and remains committed to strengthening and continuously improving the Group’s internal control framework. As at the date of this statement, the remedial measures set out below have been implemented, with validation of their operating effectiveness by Group Internal Audit Department (“GIAD”). The Audit Committee and the Board have reviewed the inhouse internal audit function and are satisfied with the level of independence and the competence of its staff. In order to improve the effectiveness of the internal audit function, the Board has empowered the internal auditors to exercise more influence in determination of their scope of work and the implementation of their audit strategy which includes the following: a) C learly defined terms of reference, authorities and responsibilities of the various committees, which include Audit Committee, Nomination and Remuneration Committee; b) R egular and comprehensive reporting to Management and the Board on financial performance and key business indicators; STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL GOVERNANCE DESTINI BERHAD 102 ANNUAL REPORT 2026
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