130 FGV HOLDINGS BERHAD ABOUT FGV MANAGEMENT DISCUSSION & ANALYSIS VALUE CREATION GROUP INTERNAL AUDIT SUMMARY OF WORK DONE BY GROUP INTERNAL AUDIT IN FY2021 ASSURANCE The assurance work during the year 2021 was a balance of governance, risk and control at the corporate centre level and business operational level. The focus was in the following main areas: At the business operational level, the key audit scopes were on the fresh fruit bunches (FFB) purchasing, crude palm oil (CPO) inventory management, FFB to CPO and palm kernel revenue supply chain and billing management, trading and hedging of CPO and PPO, OEM products management, project management, security management and reporting of operational information. For our main Business Cluster, i.e. Upstream, the key audit scopes were mechanisation, migrant workers’ welfare management, wages management, procurement, inventory management, security management, by-products management and road & bridges project management. GIA also undertook Control Self-Assessment for 147 FGVPM estates in the year 2021. Corporate governance and risk management processes towards enhancing general governance and risk management practices and culture. Recurrent related party transactions review with a view of advising the AC on the Group’s compliance with the Related Party Transactions and Recurrent Related Party Transactions Policy. Review of investment and divestment decision making and execution processes. Information Technology (IT) governance and controls which covers application functionality review, data integrity, user access control and system security including cyber security. INVESTIGATION Group Internal Audit undertakes investigative audits based on the request and information from Whistleblowing Committee, Management, AC and the Board. The outcome of the investigations are reported to the Whistleblowing Committee, Management, ACand the Board respectively. The recommendations and resolutions arising from the investigation reports tabled are communicated to Management for the necessary actions for implementation. Group Internal Audit’s investigations and special review work during the year 2021 identified improvements in the following areas: • Revenue accounting • Operations management • Stock management • Procurement management • Project management • Human resource management CONSULTING Group Internal Audit plays an active role in advising the Group on various matters. In FY2021, consulting advisory was provided through the following platforms: • IT Project Steering Committee and Working Committee meetings to provide guidance on IT project management and system development or implementation processes • Participation in working committee on issues related to the ban on palm oil products by the United States • Provided feedback and queries on matters circulated and submitted to GMC for approval on process, clarity and transparency of information presented. The focus of Group Internal Audit’s feedback on the documents was from the aspect of compliance with any regulatory requirements, incorporating practical best practices and enhancing governance and risk management • Participation in meetings with Divisional Management and Sector Management to close the gaps relating to recurring audit issues PERFORMANCE REVIEW During the financial year, the Board evaluated the AC’s performance and the extent to which the AC met the requirements of its ToR, including the term of office and performance of the AC and each of its members. This performance assessment constituted part of the annual BEA, pertaining to the assessment of Board Committees. This Report was made in accordance with a resolution of the Board of Directors approved on 30 March 2022. How We Are Governed Effective Audit and Risk Management
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