Fraser & Neave Holdings Bhd Annual Report 2021

The ambit of the Group Internal Audit function is defined in the Internal Audit Charter which is reviewed by the Audit Committee annually. During the financial year, the key activities carried out by Group Internal Audit included the following: • Performed periodic audits of key subsidiaries and regional o&ce operations within the Group to test appropriateness of control design and implementation as well as compliance with existing policies and procedures. This included the conduct of the following audits: – sales activities covering order processing, cooler and chiller management, distributor management, market returns management, customer master f ile management, credit management and collections; – marketing activities encompassing marketing plans and sponsorships, appointment and performance evaluation of media/advertising agencies, budget planning and marketing spend, advertising and promotion stock, promotion programs and brand promoters; – plant operations covering raw, packaging and work-in-progress materials management, production and qualit y control management, repair and maintenance of plant facilities as well as plant safety and security; – logistics and distribution, covering finished goods management, transporters as well as warehouse security and safety; – human capital management covering human resources administration, payroll processing, segregation of duties, industrial relations and employee relations management, training and sta! development as well as building facilities and security; – procurement activities covering pre-qualification, sourcing, appointment, performance appraisal of suppliers, monitoring of purchase orders, contract management, vendor master file management and Capex projects; – information technology, covering access management, change management, IT operations (backup, disaster recovery, incident management), network security, cyber security, IT budget monitoring, project management and vendor management; – Anti-Corruption System; and – governance practices covering implementation of Group Policies, risk management process and legal documents management. • Performed ad hoc audits to address specific management’s concerns. • Collated the status of implementation of audit recommendations provided by responsible management teams for reporting to the Audit Committee on a quarterly basis. The operational costs incurred by Group Internal Audit for the financial year 2021 amounted to about RM1.5 million (FY2020 was RM1.4 million). In addition, Group Internal Audit incurred an amount of RM157,000 for outsourced IT audit services provided by a leading international audit firm for the financial year 2021. Previously, IT audits were performed by Group Internal Audit from its parent company, Fraser and Neave, Limited. OTHER MATTERS The related party transactions entered into by the Group were reviewed by the Audit Committee to ensure that they were conducted on the Group’s normal commercial terms and adequate internal procedures had been deployed in the Group in relation to such transactions; for monitoring compliance with the Bursa Securities Listing Requirements and to ascertain that the transactions entered into were not prejudicial to the interest of the non-controlling shareholders. The Audit Committee were also apprised of recurrent related party transactions, particularly towards monitoring that amounts transacted were within the approved shareholders’ mandate obtained. The Audit Committee was satisfied that during the financial year under review, the related party transactions were fairly concluded on prevailing market rates/prices, had been carried out at arm’s length basis and normal commercial terms/conditions, applicable industry norms and were not detrimental to the interests of the Company and its minority shareholders. As at the date of this report, the Audit Committee had also reviewed the “agreed-upon procedures” performed by Group Internal Audit in relation to the allocation of share grants under the Restricted Share Grant Plan at the end of the financial year. This was to ensure that the actual and target key performance indicators were computed accurately based on the audited and approved budget figures to support the allocation of share grants to employees. The Statement on Corporate Governance, Statement on Risk Management and Internal Control and the Audit Committee Report for inclusion in this Annual Report were reviewed by the Audit Committee prior to Board’s approval. The Audit Committee also reviewed the declaration of interim dividend and recommendation of final dividend, the press release relating to financial results, its revised TOR and the guidelines on related party transactions prior to the respective Board and/or shareholder approvals. For the financial year 2021, the Audit Committee was of the view that the Company was in compliance with the Main Market Listing Requirements (“MMLR”) and as such, the reporting to Bursa Securities under Paragraph 15.17 (Rights of the Audit Committee) of the MMLR was not required. For the financial year under review, the Board assessed the performance of the Audit Committee through the annual evaluation exercise. The Board agreed that the Audit Committee had continued to support the Board in reviewing financial and audit matters, contributing to the overall effectiveness of the Board’s decision- making process. The Board was satisfied that the Audit Committee had discharged its functions, duties and responsibilities in accordance with the Audit Committee’s TOR. 138 AUDI T COMMI TTEE REPORT