Effective Stewardship Through Good Governance Effective Stewardship Through Good Governance Press Metal Aluminium Holdings Berhad 84 85 Integrated Annual Report 2023 WEAKNESSES A few weaknesses in internal control were identified during the period, all of which have been, or are being addressed. None of these weaknesses resulted in any material errors, losses, contingencies or uncertainties that would warrant a disclosure in the Group’s annual report. OTHER KEY ELEMENTS OF INTERNAL CONTROL Apart from risk management and internal audit, the other key elements of the Group’s internal control system are described below: • A management structure with job descriptions and defined lines of responsibilities is in place for all business operating units; • Six (6) of its subsidiaries have the following accreditation for their operational processes: PMB Aluminium Sdn. Bhd. • ISO 9001:2015 on Quality Management Systems • ISO 14001:2015 on Environmental Management Systems • ISO 45001:2018 on Occupational Health and Safety Management Systems Press Metal International Limited • ISO 9001:2015 on Quality Management Systems • ISO 14001:2015 on Environmental Management Systems • ISO 45001:2018 on Occupational Health and Safety Management Systems • ISO 50001:2018 on Energy Management Systems • IATF 16949:2016 on Automotive Quality Management Systems Press Metal Sarawak Sdn. Bhd. • ISO 9001:2015 on Quality Management Systems • ISO 14001:2015 on Environmental Management Systems • ISO 45001:2018 on Occupational Health and Safety Management Systems • ISO 50001:2018 on Energy Management Systems Press Metal Bintulu Sdn. Bhd. • ISO 9001:2015 on Quality Management Systems • ISO 14001:2015 on Environmental Management Systems • ISO 45001:2018 on Occupational Health and Safety Management Systems • ISO 50001:2018 on Energy Management Systems Press Metal International Technology Ltd. • ISO 9001:2015 on Quality Management Systems • ISO 14001:2015 on Environmental Management Systems • ISO 45001:2018 on Occupational Health and Safety Management Systems • IATF 16949:2016 on Automotive Quality Management Systems Press Metal Aluminium Rods Sdn. Bhd. • ISO 9001:2015 on Quality Management Systems • ISO 14001:2015 on Environmental Management Systems • ISO 45001:2018 on Occupational Health and Safety Management Systems • Review of all proposals for material capital and investment acquisitions by Management prior to the review and approval by the Board; • Management meeting is conducted on a monthly basis for all business unit heads to present business performance results as well as key performance indicators, such as product sales analysis and operating cost analysis and highlight significant matters. These performance reports are benchmarked against budget; • Quarterly review and approval of the Group’s financial results by the AC and Board; • The Group performs an annual budgeting and forecasting exercise. A comprehensive operating capital expenditure requirement is tabled to the Board for approval at the commencement of a new financial year; • Periodic visits to business operating units by Board members and the management team; • Quarterly review of the Group’s related party transactions by the AC; • Clearly documented policies including the Code of Conduct, Code of Ethics, Whistle-Blowing Policy, ABAC Policy which serves as primary guidance on the ethical and behavioural conduct of the Group; and • Clearly defined Terms of Reference, authorities and responsibilities of the various committees which include the Audit Committee, Risk Management Committee, Nomination and Corporate Governance Committee, Remuneration Committee, Sustainability Committee and Investment Committee. Management has taken the necessary actions to remediate the weaknesses identified for the financial year under review. The Board and the Management will continue to monitor the effectiveness and take measures to improve risk management and internal control systems. Statement on Risk Management and Internal Control Statement on Risk Management and Internal Control ASSURANCE PROVIDED BY THE GROUP CHIEF EXECUTIVE OFFICER AND GROUP FINANCIAL CONTROLLER In line with the Guidelines, the Group Chief Executive Officer and Group Financial Controller have provided assurance to the Board stating that the Group’s risk management and internal control system have operated adequately and effectively, in all material aspects, to meet the Group’s objectives during the period under review. For the financial year under review, the Board believes that there were no significant internal control deficiencies or material weaknesses resulting in material losses or contingencies requiring disclosure in this Integrated Annual Report. The Board is of the view that the existing system of risk management and internal controls is considered appropriate and adequate to safeguard shareholders’ investments, stakeholders’ interests and the Group’s assets. Nevertheless, the Board acknowledges that the Group’s system of risk management and internal control practices must evolve on an ongoing basis in order to meet the ever changing and challenging business environment. In this respect, the Board will continuously assess and enhance the Group’s risk management and internal controls system. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Audit and Assurance Practice Guide (“AAPG”) 3, Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the Integrated Annual Report of the Group for the year ended 31 December 2023 and reported to the Board that nothing has come to their attention that causes them to believe that the statement intended to be included in the Annual Report of the Group, in all material respects: (a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, or (b) is factually inaccurate. AAPG 3 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Board of Directors and management thereon. The auditors are also not required to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in the annual report will, in fact, remedy the problems.
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