There are always potential business risks that can prevent enterprises from achieving their goals. PVCFC is fully aware that an effective internal control system must ensure prevention and reduction of possible risks. In order to ensure stability in current conditions and sustainable development in the future, PVCFC has built, completed and standardized its internal control system according to the model of The three lines of defense (issued in July 2020 by The Institute of Internal Auditor IIA) based on appropriateness with basic characteristics of enterprises.

Photo: 3 Lines of Defense

Note

• Flow responsible disclosure
• Assigning responsibility, guiding, providing resources, supervising
• Arranging, coordinating, communicating, cooperating

According to good practices, PVCFC focuses on completingsystem of principles, regulations, policies to optimize its activities, minimizing material risks, creating added values and improving its competitive position compared to competitors. PVCFC has implemented Policy Framework Project to consolidate governance system with a roadmap of 4 items including:

1

Standardizing value chain

2

Standardizing internal normative document system and constructing RACI chart

3

Building Risk Control Matrix

4

Digitizing professional processes.

Accordingly, value chain standardization is considered as a premise for PVCFC to plan activities related to creation or increase of product & service value and important activities capable of creating sustainable competitive advantage for the Company.

Based on the value chain, PVCFC shall issue RACI Chart for regulations to support BOD, General Director, divisions and units to decentralize implementation of each activity in the entire value chain rather than separately implementing according to each functional division. Next, PVCFC shall identify material checkpoints and build the control matrix. This helps Line 1 (divisions) identify work risks and risk response solutions; Line 2, 3 to strengthen data synchronization on risk profiles/input process to support activities of inspection and supervision according to risk orientation and creating conditions for accelerating the process of decision-making of competent units thanked to elimination of unnecessary checkpoints or unnecessary control points. Given the achieved results, after completion of process standardization, PVCFC shall promote digitalization of professional process by electronic office (EO) software, ERP and others. This accelerates thorough connection of information and data, speeding coordination progress between divisions as well as process of decision-making of competent units.