GIAD's scope of coverage encompasses all business and support units, including subsidiaries that do not have their own audit units. The selection of the units to be audited from the audit universe is based on an annual audit plan that is approved by the AC. The annual audit plan is developed based on assessment of risks, exposures and strategies of the company. Units that are assessed to be high risk are subject to an annual audit, while those that are assessed to be medium or low risk are subject to a cycle audit. GIAD also undertakes investigations into alleged fraud by staff, customers or third parties and recommends appropriate improvements to prevent recurrence and actions against the responsible individual. The Audit Report is the final product of an audit assignment, which provides the scope of audit work performed, a general evaluation of the system of internal controls together with detailed audit observations, response of management, and comments and recommendations by GIAD for improvement. The AC reviews and evaluates any exceptions or non-compliance raised by GIAD and monitors that appropriate and prompt remedial actions are taken by the management. The GIAD is committed to provide an independent, objective assurance and advisory services that will add value and improve the company's operations. It does this by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes, in line with the conceptual framework and guidance promulgated by the Institute of Internal Auditors ("IIA''), Global Internal Audit Standards and relevant regulatory guidelines. During FY2026, GIAD conducted internal audit reviews covering the following areas: a) Destini Prima Sdn. Bhd. (SAR Workshop); b) D estini Oil Services Sdn. Bhd. (Client Contract Management); c) M Rail Technics Sdn. Bhd.; d) Destini Energy Sdn. Bhd.; e) Hijau Baiduri Sdn. Bhd.; and f) Group’s Risk Management Report as at 30 March 2026. The respective audit findings, together with Management’s responses and recommendations for improvement, were presented to the AC and RMC for review and deliberation. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS The External Auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the Annual Report of the Company for the financial year ended 30 June 2026 and reported to the Board that nothing has come to their attention that causes them to believe that this statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control. MANAGEMENT'S ASSURANCE The Board has received assurance from the Executive Director/Group Managing Director and the Chief Financial Officer that the risk management and internal control framework established by the Group, the Group’s risk management and internal control systems are operating adequately and effectively in all material respects. CONCLUSION For FY2026 and up to the date of approval of this statement, there were no significant internal control deficiencies or material weaknesses that have resulted in material losses or contingencies requiring disclosure in the Annual Report. Based on the reviews undertaken and the assurance received, and taking into account the control weaknesses identified in respect of revenue recognition and financial reporting and the remedial measures implemented to address them, the Board is satisfied that the Group’s risk management and internal control systems are adequate. Nevertheless, the Board recognises that the system of risk management and internal control must continuously improve in line with the Group's business environment. Therefore, the Board would put in place adequate plans, where necessary, to continuously improve the Group's system of risk management and internal control. The Statement on Risk Management and Internal Control was approved by the Board on 27 October 2026. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL GOVERNANCE DESTINI BERHAD 104 ANNUAL REPORT 2026
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