Report of the Audit Committee
To the Shareholders of Siam City Cement Public Company Limited
We are pleased to present our report for the financial year ended 31 December 2019.
The Audit Committee comprises 3 independent directors and performed its duties as assigned by the Board of Directors under a written Charter adopted by the Audit Committee and approved by the Board of Directors and in compliance with the regulations of the Stock Exchange of Thailand (SET).
In 2019, the Audit Committee held 11 monthly meetings. In the meetings, the Audit Committee discussed with the Management, the Internal Audit and the Company’s External Auditors, various topics under its responsibility, such as integrity of financial reporting, effectiveness of the risk management system, internal control system covering its operations in Thailand and overseas subsidiaries and lead to further strengthening of internal control, risk management, technology and global best practices, and compliance to all relevant laws and regulations.
The Audit Committee’s main activities are summarized below:
Financial Reports Review: The Audit Committee reviewed quarterly, annually and consolidated financial statements for the year 2019 of Siam City Cement Public Company Limited and subsidiaries, including related party transactions and items with potential conflicts of interest with the Management and the Internal Auditor and External Auditor. The Audit Committee discussed with the External Auditor on the accuracy and completeness of the financial statements, significant adjustment which affected to the financial statements, adequacy and suitability of account recording methods, audit scope, accuracy and adequacy of information disclosure as well as the External Auditors’ independence. These were to ensure that the financial statements were prepared in conformity with legal requirements and generally accepted accounting principles, reliable and timely, and information was sufficiently disclosure. In addition, the Audit Committee also held one private meeting with the External Auditor in the absence of the Management to discuss the external audit plan and approach and the results of their examinations and evaluations of the Company’s internal controls, and the quality of financial reporting.
Internal Audit Oversight: The Audit Committee reviewed the Internal Audit performance, audit findings and recommendation on a monthly basis. The Audit Committee provided recommendations and monitored corrective actions for significant aspects for good governance and adequate internal control. Where the improvements were required, the Audit Committee was satisfied that Management had taken appropriate remedial actions. The Audit Committee requested special reviews of the areas with high risk such as cyber security, support functions, subsidiaries, etc. Finally, the Audit Committee reviewed and approved an Internal Audit Annual Plan 2020 including the budget to support the plan.
Internal Control Effectiveness Review: The Audit Committee reviewed the internal control system together with Internal Auditor and Risk Advisory Services on a monthly basis, and with Group Chief Finance Officer and External Auditors on a quarterly basis by reviewing stewardship of properties, resource assumption, prevention or reduction of errors or damage, losses, waste, or corrupt practices, operations, credibility of financial reports, and compliance with relevant laws and regulations. The Company’s External Auditor agreed that no significant issues or shortcomings were found. The Audit Committee reviewed the updated Manual of Authorities and Policy Landscape that was implemented across the group in 2019.
Review of Compliance and Good Corporate Governance: In 2019, the Audit Committee focused on the management policy in support of systematic corporate governance and leveraging IT in conducting corporate governance and internal audit to increase the efficiency and preventing non-compliance with the laws and company regulations that relevant to the business. In addition, Audit Committee also reviewed the WhistleBlower complaints received through the “INSEE Speak Up” hot line and investigations thereon and provided recommendations on process improvement to raise efficiency and ensure alignment with good governance.
Risk Management Review: The Audit Committee reviewed the Company’s risk management mechanism of the risks arising from both internal and external. The Audit Committee also reviewed the efficiency and suitability of risk management processes regularly and provided recommendations for improvement, which have been incorporated in the Risk Management framework for 2020.
Appointment of the External Auditors for 2020: The Audit Committee recommended the appointment of Ms. Siriwan Nitdamrong and/or Ms. Kamontip Lertwitworatep and/or Ms. Sarinda Hirunprasurtwutti of EY Office Limited as the Company’s External Auditors for 2020 with its audit fees for the Board’s concurrence and the shareholders’ approval at the AGM 2020.
In summary, the Audit Committee performed its duties and responsibilities stated in its Board-approved charter with competence, experience, care, prudence, and adequate independence for the equitable benefit of stakeholders. Whilst reviewing the quarterly and annual financial statements for 2019, and the above-mentioned assessments performed by the External and Internal Auditors, the Audit Committee did not note non-compliance of the Company’s activities with the Securities and Exchange Act and with rules and regulations of the Stock Exchange of Thailand.
February 12, 2020
For and on behalf of the Audit Committee
Siam City Cement Public Company Limited
Dr. Sunee Sornchaitanasuk
Chairperson of the Audit Committee