Effective Stewardship Through Good Governance Effective Stewardship Through Good Governance Press Metal Aluminium Holdings Berhad 70 71 Integrated Annual Report 2023 PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D) III. Remuneration (cont’d) The RC establishes the framework and policies, as well as reviews the remuneration of Directors and Senior Management that is linked to strategy and/ or performance and long-term objectives of the Company, including the remuneration of the Non-Executive Directors. The Executive Directors’ remuneration packages are structured to link reward to individual and corporate performance and the determination of the same is a matter to be decided and approved by the Board as a whole. The Executive Directors concerned were abstained from deciding their own remuneration. As for Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken. The current remuneration payable to Non-Executive Directors comprises Directors’ fees and meeting allowance, based on the number of meetings attended in a year. Non-Executive Directors’ remuneration is a matter to be decided by the Board as a whole, with the Director concerned abstaining from deliberations and voting on decisions in respect of his or her individual remuneration, prior to the tabling of such for shareholders’ approval at the Company’s AGM. The Directors who are shareholders of Press Metal will abstain from voting on the resolution relating to the payment of the Directors’ fees and benefits at the AGM of the Company. Meeting of the RC is held as and when necessary, and at least once a year. One (1) RC meeting was held during the FYE2023 and full attendance by the members was recorded. The RC has carried out the following activities during the financial year under review: (a) Reviewed and recommended the remuneration package of the Group CEO and Executive Directors of the Company for the Board’s approval; (b) Reviewed and recommended the Directors’ fees and other benefits payable to the Non-Executive Directors for the Board’s endorsement and the approval of the shareholders at the Company’s AGM; (c) Reviewed the proposed changes to the ESG-Linked Executive Incentive Remuneration Framework for Key Senior Management personnel of the Group; and (d) Reviewed the approaches adopted in the formulation of the ESG-Linked Incentive-Based Compensation Policy for Key Senior Management Personnel. The details of the Directors’ Remuneration for the FYE2023 are disclosed in the CG Report 2023 under Practice 8.1. PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT I. Audit Committee The Board upholds the integrity of financial reporting. The AC is entrusted to provide advice and assistance to the Board in fulfilling its statutory and fiduciary responsibilities relating to the Company’s internal and external audit functions, risk management, compliance systems and practices, financial systems, accounting and control systems and matters that may significantly impact the financial condition or affairs of the business. The AC is also responsible for ensuring that the financial statements of the Company comply with the applicable financial reporting standards in Malaysia. The AC comprises four (4) Independent Non-Executive Directors who play a key role in ensuring the integrity and transparency of corporate reporting. None of the AC members were former audit partners who are required to observe a cooling-off period of at least three (3) years before being appointed in accordance with the Terms of Reference of the AC. The AC provides robust and comprehensive oversight on financial reporting, objectivity and effectiveness of external and internal audit processes, reportable related party transactions, conflict of interest and potential conflict of interest situations as well as risk management matters. Corporate Governance Overview Statement PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (CONT’D) I. Audit Committee (cont’d) The AC Chairman is distinct from the Chairman of the Board. All AC members possess the requisite financial literacy and business knowledge that support the sound understanding of matters under their purview, with the AC’s composition, term of office and performance being subject to annual review by the NCGC annually to determine whether the AC as a whole and its members have carried out their duties in accordance with the Terms of Reference of the AC before recommendation to the Board for assessment. The Board is satisfied that the AC members discharged their functions, duties and responsibilities in accordance with the AC’s Terms of Reference. The AC has unrestricted access to both the internal and external auditors, who report functionally and directly to the AC. The AC has established transparent arrangements to maintain an appropriate relationship with the Company’s auditors. Assessment of Suitability, Objectivity and Independence of External Auditors In the annual assessment of the suitability, objectivity and independence of the External Auditors, the AC is guided by the factors as prescribed under Paragraph 15.21 of the MMLR of Bursa Malaysia. The AC is also to consider the performance of the External Auditors and its independence as below: (a) The External Auditors’ ability to meet deadlines in providing services and responding to issues in a timely manner as contemplated in the Audit Planning Memorandum; (b) The competence, audit quality and resource capacity of the External Auditors in relation to the audit; (c) The information presented in the Annual Transparency Report of the audit firm; (d) The nature of the non-audit services provided by the External Auditors and fees paid for such services relative to the audit fee; and (e) Whether there are safeguards in place to ensure that there is no threat to the objectivity and independence of the audit arising from the provision of non-audit services or tenure of the External Auditors. In the fourth quarter of 2023, the Company’s External Auditors, KPMG PLT, presented its 2023 Audit Planning Memorandum which outlined its engagement team, audit timeline and areas of audit emphasis for the AC’s review. As part of the AC’s review processes, the AC has obtained assurance from KPMG PLT, confirming that they are and have been independent throughout the conduct of the audit in accordance with the terms of relevant professional and regulatory requirements. Based on the AC’s assessment of the External Auditors, the Board is satisfied with the independence, quality of service and adequacy of resources provided by the External Auditors in carrying out the annual audit for the FYE2023. In view thereof, the Board has recommended the re-appointment of the External Auditors for the approval of shareholders at the forthcoming 8th AGM. Internal Audit Function The Group has an in-house internal audit department, which is augmented with outsourced Internal Auditors for specialised expertise in selected areas. The internal audit function is independent of the activities or operations of the other operating units in the Group. The internal audit function adopts a risk-based audit approach when executing each audit assignment which is carried out in accordance with the annual audit plan. The annual audit plan covers the major subsidiaries of the Group. The internal audit function provides the AC and the Board with assurance regarding the adequacy and integrity of the systems of risk, governance and internal controls. Corporate Governance Overview Statement
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