Effective Stewardship Through Good Governance Effective Stewardship Through Good Governance Press Metal Aluminium Holdings Berhad 78 79 Integrated Annual Report 2023 SUMMARY OF THE ACTIVITIES OF AC (CONT’D) (2) External Audit (a) Reviewed, discussed and approved the External Auditor’s terms of engagement, audit planning memorandum of the Group, including the scope of work of the External Auditors to ensure it adequately covers the activities of the Group for the FYE2023 at the meeting held on 27 November 2023. (b) Reviewed with the External Auditors the results of the audit, the relevant audit reports and Management Letters together with the Management’s responses and comments to the findings. (c) Carried out annual assessment on the performance, suitability, capabilities and independence of the External Auditors based on amongst others, the External Auditors’ competency and audit independence, objectivity and professional scepticism before recommending to the Board their re-appointment and remuneration. The AC also considered the External Auditors’ Transparency Report in the review. To ensure that the External Auditors’ independence is not impaired, the Audit Engagement Partner in charge of the Company is changed every seven (7) years and is required to observe a cooling-off period of five (5) years before being re-appointed, which is in line with the recommendation by the MIA. Internally, the External Auditors conduct an Independent Partner Review in order to preserve their independence. The External Auditors had also provided written assurance to the AC that in accordance with the terms of all relevant professional and regulatory requirements, they had been independent throughout the audit engagement. (d) Had private sessions with the External Auditors during the financial year, i.e., on 23 February 2023 and 27 November 2023 respectively without the presence of any executive Board members and Management to ensure there were no restrictions on their scope of audit and to discuss any matters that the External Auditors did not wish to raise in the presence of the Management. During the private sessions with the External Auditors, it was noted that there were no major concerns from the External Auditors and they had been receiving full cooperation from the Management during their course of audit. (e) Reviewed the audit and non-audit fees and recommended to the Board for approval. The AC also reviewed the list of services of which are considered non-assurance services; not prohibited by the MIA By-Laws and IESBA Code of Ethics and will not create a threat to the External Auditors’ independence as auditor, which were pre-approved by the AC. (f) At the meeting held on 23 February 2024, the AC reviewed and discussed with the External Auditors the status of the audit for the FYE2023 including the issues arising from their audit of the annual financial statements and their resolution of such issues as highlighted in their report to the AC. (g) Reviewed and assessed audit focus areas on hedge effectiveness of commodity and foreign exchange hedges conducted by the External Auditor. (3) Internal Audit (both in-house and outsourced) (a) At the meeting held on 23 February 2023, the AC reviewed the adequacy of the scope, functions, competency and resources of the internal audit function to ensure its effectiveness and efficiency. (b) Reviewed and approved the Internal Audit Plan for 2023 to ensure adequate scope and comprehensive coverage over the activities of the Company and the Group, sufficient resources requirements as well as budget of in-house Internal Audit Department to carry out its functions. (c) Reviewed and discussed the findings on the internal audit reports which were tabled during the year, the audit recommendations made, as well as the Management’s response to these recommendations and the implementation of the agreed action plan on a quarterly basis. (d) Reviewed the progress updates on the follow-up audit review of the previous internal audit reports and monitored the implementation of mitigating actions taken by Management on outstanding issues to ensure all key risks and control weaknesses are properly addressed. Audit Committee Report Audit Committee Report SUMMARY OF THE ACTIVITIES OF AC (CONT’D) (3) Internal Audit (both in-house and outsourced) (cont’d) (e) Met with the outsourced Internal Auditors on 26 May 2023 and in-house Internal Auditors on 26 May 2023, 25 August 2023 and 27 November 2023 respectively, all of which without the presence of any executive Board members and the Management for discussion on internal audit related matters. (4) Related Party Transactions (a) Reviewed and considered any related party transactions (“RPTs”), conflict of interest and potential conflict of interest situations that may arise within the Company or the Group, including any transactions, procedure or course of conduct that may raise questions of Management integrity or impartiality. (b) Reviewed the RPTs and recurrent RPTs (“RRPTs”) on a quarterly basis to ensure that the transactions entered into were at arm’s length basis and on normal commercial terms and not detrimental to the interests of the minority and non-interested shareholders of the Company. (c) Reviewed the Circular to Shareholders in respect of the RRPTs prior to recommending for the Board’s approval on 19 April 2023 to seek shareholders’ mandate at the Annual General Meeting of the Company. (5) Corporate Governance and Regulatory Compliance (a) Reported to and updated the Board on significant issues and concerns discussed during the AC meetings and where appropriate, made the necessary recommendation to the Board. (b) Reviewed the AC Report, Statement on Risk Management and Internal Control (particularly items related to internal controls), Additional Compliance Information and Directors’ Responsibility Statement in respect of the Audited Financial Statements, prior to recommending for Board’s approval and inclusion in the Company’s Annual Report. (c) Conducted a self-assessment exercise to evaluate their own effectiveness in discharging their duties and responsibilities. (d) Reviewed the revised Terms of Reference of AC, Anti-Bribery and Anti-Corruption Policy and Related Party Transaction Policy prior to recommending for Board’s approval. (e) Reviewed and recommended to the Board the adoption of the Conflict of Interest Policy together with the various policies which stipulate the framework and appropriate control and measures for management of conflicts and NonAssurance Services Pre-Approval Policy. (f) Reviewed the internal controls for hedging and Information Technology with the assistance of the External Auditors. (g) Approved the appointment of the new in-house Head of Internal Audit. INTERNAL AUDIT FUNCTION The primary role of the internal audit function is to undertake regular and systematic review of the systems of internal control so as to provide sufficient assurance that the Group has a sound system of internal control and that established policies and procedures are adhered to. A risk-based audit approach is implemented to ensure that higher risk activities in each auditable area are audited more frequently. This is designed to evaluate and enhance risk management, control and governance processes to assist the Management in achieving its corporate goals. The audits further help to ensure that appropriate instituted controls are in place and effectively applied, and risk exposures are mitigated to an acceptable level in accordance with the Group’s risk management policy.
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