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Kumpulan Fima Berhad (11817-V) •
Annual Report 2018
3.5 The periodic and streamlining review of limits of
authority and other standard operating procedures
within the Group provides a sound framework of
authority and accountability within the organisation
and to facilitate quality, well informed and timely
corporate decision making at the appropriate level in
the organisation’s hierarchy.
3.6 The compliance function, which includes the Audit
Committee and internal audit function carried out by
the Group Internal Audit Department (“GIA”), assists the
Board to oversee the management of risks and review
the effectiveness of internal controls. The Committee
reviews reports of the GIA and also conducts annual
assessment on the adequacy of the GIA’s scope of
work.
3.7 The Audit Committee convenes regular meetings
to deliberate on findings and recommendations for
improvement by both the internal and external auditors
on the state of the system of internal control. Minutes of
the Audit Committee meetings are tabled to the Board.
3.8 Review and award of major contracts by the project
committees and teams, subject always to the delegated
authority limits set by the Board. A minimum of three (3)
quotations is called for and tenders are awarded based
on criteria such as quality, track record and speed of
delivery.
3.9 The Risk Management Committee (“RMC”) convenes
meeting annually to review and recommend the risk
management policies, strategies, key risk profiles and
risk mitigation actions for the Group and reports to the
Audit Committee.
3.10 Clearly documented standard operating procedure
manuals set out the policies and procedures for day
to day operations to be carried out. Regular reviews
are performed to ensure that documentation remains
current, relevant and aligned with evolving business
and operational needs.
3.11 The competency of staff is enhanced through rigorous
recruitment process and development programmes. A
performance appraisal system of staff is in place, with
established targets and accountability and is reviewed
annually.
4.
INTERNAL AUDIT FUNCTION
The Group’s internal audit function is undertaken by the
GIA, which reports directly to the Audit Committee and
administratively to the Group MD. The GIA assists the Audit
Committee in discharging its duties and responsibilities. Its
key role is to provide independent and objective assurance
designed to add value and assist the Group in accomplishing
its objectives by bringing a systematic, disciplined approach
to evaluate and improve the effectiveness of risk management,
internal control system and governance processes.
The business processes and conduct of the operating units
within the Group are continuously assessed by GIA in the
context of adequacy and effectiveness of the financial,
operational controls and risk management. GIA reports to
the Audit Committee and communicates to management
on audit observations noted in the course of their review
and performs monitoring on the status of actions taken by
the operating units. It conducts independent reviews of the
key activities within the Group’s operating units based on
a detailed annual audit plan developed using a risk-based
methodology including input from Senior Management and
the Audit Committee, which was approved by the Audit
Committee. The Terms of Reference of the GIA are clearly
spelt out in its Internal Audit Charter.
The GIA evaluates the following:
(a)
Adequacy, integrity, effectiveness of the Company
and the Group’s internal controls in safeguarding
shareholders’ investment and the Group’s assets.
The internal controls cover financial, operational,
information technology, compliance controls and
enterprise risk management;
(b)
Extent of compliance with established policies,
procedures and statutory requirements; and
(c)
Adequacy of policies, procedures and guidelines on
the Company and Group’s accounting, financial and
operational activities.
For the year under review, the GIA had undertaken the
following work:
(a)
Prepared the annual audit plan for approval by the Audit
Committee.
(b)
Performed risk-based audits based on the approved
annual audit plan, including follow-up of matters from
previous internal audit reports.
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL