FGV Annual Report 2015

118 Felda Global Ventures Holdings Berhad Annual Integrated Report 2015 Statement on Corporate Governance Group Internal Audit provides independent and objective assurance of the adequacy and effectiveness of governance, risk management and controls processes of the Group locally and overseas covering all operations where the Group has management control and where partners consent for jointly controlled entities. In addition to the assurance role, Group Internal Audit also undertakes consulting role and investigative role. In its consulting role, Group Internal Audit undertakes policy and procedures review, participate in working groups to provide input on policy development, systems development and several initiatives of the Group. Investigative audits are undertaken where there are improper, illegal and dishonest acts reported through the Whistleblowing Channel of the Group or from other sources. In keeping to the scope of internal auditing as defined in the Institute of Internal Auditors’ International Standards for the Professional Practise of Internal Auditing, Group Internal Audit has ceased undertaking new investigation audits since 1 September 2015. The investigation role has been centralised at the Group Human Resources Division from 1 September 2015 onwards. The assurance internal audits are planned on a risk based approach which prioritises the audit requirements of the Group’s diverse and distributed business operations. Based on the risk assessment, priority ranking was assigned to each operating unit to arrive at the audit plan over 3 years. The 3-year audit plan is reviewed every year and forms the basis to derive the Annual Group Internal Audit Plan. The 3-year audit planning mechanism and Annual Group Internal Audit Plan is approved by the Audit Committee before commencement of each financial year. Each internal audit assignment is undertaken based on a careful planning to focus on covering management of risks to achieve objectives; economy, efficiency and effectiveness of operations; safeguard of assets; accuracy, reliability and timeliness of reported information; and compliance with laws, regulations and internal policies and procedures. Summary of activities of Group Internal Audit During the financial year, Group Internal Audit has undertaken the following main activities: 1. Carried out internal audits according to the Annual Group Internal Audit Plan approved by the Audit Committee and additional special unplanned audits at the request of the Audit Committee. Reported the findings, recommendations and management’s corrective action to the Audit Committee every quarterly. 2. Undertook investigative audits based on the Audit Committee’s, Management’s and Whistleblowing Committee’s requirements and reported the outcome of such investigations to the Audit Committee and Management. Group Internal Audit ceased its investigation role effective from 1 September 2015 with approval of the Audit Committee. The investigation roles fully undertaken by the management from 1 September 2015. 3. Undertook selective follow-up audits and implemented periodical follow-up mechanisms for all audit recommendations. The status of implementation tracked was reported to the Management Audit Committee monthly and accordingly reported to the Audit Committee every quarterly. 4. Undertook follow-up of the matters reported by the external auditor in its Audit Committee report. 5. Undertook Recurrent Related Party Transactions review for the purpose of supporting the Audit Committee’s statement in the Circular to the Shareholders to seek mandate on new and existing Recurrent Related Party Transactions of the Group. 6. Participated in working groups and reviewed draft documents to provide input in periodical policy review exercises or new formulation of the Board Charter, the Terms of Reference of the Board Committees, various Group level policies, the Statement on Risk Management and Internal Control 2014, the Report on the Audit Committee 2014 and the Statement on Corporate Governance 2014. 7. Attended IT Project Steering Committee meetings to provide guidance on control processes. 8. Undertook relevant recruitment, training and development activities to be adequately resourced. The total cost incurred for Group Internal Audit for the financial year ended 31 December 2015 is RM10.49 million (2014: RM11.05 million). This Report is made in accordance with a resolution of the Board of Directors and approved at the Board Meeting dated 29 March 2016.