Effective Stewardship Through Good Governance Effective Stewardship Through Good Governance Press Metal Aluminium Holdings Berhad 80 81 Integrated Annual Report 2023 INTERNAL AUDIT FUNCTION (CONT’D) The Group has an in-house Internal Audit Department (“Group Internal Audit”) which provides the internal audit function to the Group. The Group Internal Audit is additionally supported by a professional firm providing specific outsourced internal audit services, namely Baker Tilly Monteiro Heng Governance Sdn. Bhd. (“BTMHG”) who conducted the independent internal audit review on the RPTs of the Group. Both Group Internal Audit and BTMHG report directly to the AC and have affirmed to the AC that they are free from any relationships or conflicts of interest in respect of the Group or the Company which could impair their objectivity and independence. The Company has put in place internal controls, guidelines and procedures to ensure that RPTs and RRPTs are entered into on normal commercial terms and on terms which are not more favourable than those generally available to third parties dealing on arms’ length basis and are not detrimental to the minority shareholders of the Company. During the FYE2023, the Group Internal Audit developed an audit plan using risk-based approach and carried out the assignments according to the audit plan for the year. The Group Internal Audit performed operational audits on business units of the Group to ascertain the adequacy of the internal control systems and made recommendations for improvement where weaknesses exist in accordance with the Internal Audit Plan approved by the AC. The auditable entities and business processes are as follows: Name of entity Auditable areas Press Metal Aluminium Holdings Berhad • Currency Hedging Management • Anti-Bribery and Anti-Corruption (“ABAC”) Management Press Metal Bintulu Sdn. Bhd. • Environmental, Health and Safety (“EHS”) Management • Waste Management • Workshop Management • Anode Rodding Management • Quality Control Management • ABAC Management • Purchasing Management • Pot Tending Machine Management • Equipment Spare Part Warehouse (“ESPW”) Management • Overhead Crane (“OHC”) Management • Water Distribution Section Management • Fabrication Management Press Metal Sarawak Sdn. Bhd. • Electrolysis Management • Electrolysis Support Management • Power Distribution Management • Anode Rodding Management • Anode Repair Management • Quality Control Management • EHS Management • Waste Management • Accounting and Finance Management • ABAC Management • Purchasing Management • ESPW Management • OHC Management • Water Distribution Section Management • Fabrication Management PMB Aluminium Sdn. Bhd. • EHS Management • Waste Management • ABAC Management Press Metal Aluminium Rods Sdn. Bhd. • Production Management • Inventory Management • Quality Control Management • ABAC Management Audit Committee Report Audit Committee Report INTERNAL AUDIT FUNCTION (CONT’D) Name of entity Auditable areas PMB Aluminium Sabah Sdn. Bhd. • Sales and Marketing Management • Human Resource Management • Inventory Management • ABAC Management PMB Eastern Sdn. Bhd. • ABAC Management PMB Northern Sdn. Bhd. • ABAC Management Press Metal International Limited • Information Technology Management • Human Resource Management • Extrusion Management • Credit Risk Control Management Press Metal International Technology Ltd. • Information Technology Management • Quality Management • Human Resource Management • Facility and Maintenance Management PMB Central Sdn. Bhd. • ABAC Management The internal audit function evaluated the adequacy and effectiveness of key controls in response to risks within the Group’s governance, operations and information systems. The areas evaluated included the following: • Relevancy, reliability, integrity, accuracy, completeness and timeliness of financial and operational information of the Group; • Adequacy of controls to safeguard the Group’s assets; • Adequacy and effectiveness of the Group’s system of internal controls; • Compliance with policies, procedures, rules, regulations, guidelines, directives and laws by the Group; • Integrity of risks measurement, adequacy of control and reporting systems and compliance with approved risk management policies and procedures; • Nature of the RPTs, conflict of interest and potential conflict of interest situations that could raise questions of management integrity; • Adequacy and effectiveness of the Group’s system in assessing its capital in relation to its estimate of risks; and • Effectiveness of Information System (“IS”) in supporting the business activities and the adequacy of controls over IS management, systems development and programming, computer operations and security and data integrity. The internal audit function worked collaboratively with the ERM function to review and assess the adequacy and effectiveness of the risk management processes within the Group. Findings from the internal audit reviews, including the recommended corrective actions, were discussed with the Management and the relevant head of departments prior to being presented to AC at their scheduled meetings on a quarterly basis. During the year under review, the in-house Internal Auditors also conducted follow-up reviews of audit findings to ensure that corrective actions have been implemented in a timely manner. The total cost incurred for the internal audit function of the Group for the FYE2023 was RM1,339,000 (FYE2022: RM1,089,000).
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