Report of the Audit Committee
To the Shareholders of Siam City Cement Public Company Limited
The Audit Committee comprises three independent directors with combined skills and expertise in finance, accounting, laws and business. All members possess adequate qualifications as required by the regulations of the Securities and Exchange Commission, Thailand (SEC) and the Stock Exchange of Thailand (SET).
The Audit Committee has performed its duties independently and objectively in accordance with its charter, reviewed annually, and in line with current business priorities approved by Board of Directors. The Audit Committee advocates a strong culture of governance, integrity, ethics, accountability and transparency for a long-term sustainable business.
In 2021, the Audit Committee convened a total of 11 meetings, with attendance by all members every time.
The annual year-end performance self-assessment of the Audit Committee, as an individual and group assessment, was conducted, and the results were satisfactory. The Audit Committee considered post COVID-19 risks and cyber security in addition to the business risks in framing its priorities for year 2022.
The Audit Committee’s main activities are summarized below:
Review of Financial Reports: The Audit Committee reviewed quarterly and annually the separate and consolidated financial statements for the year 2021 of Siam City Cement Public Company Limited and subsidiaries, which were prepared in accordance with the Thai Financial Reporting Standards (TFRS), which is in compliance with the International Financial Reporting Standards (IFRS), with the Management 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, evaluation of internal controls, accuracy and adequacy of information disclosure in accordance with relevant financial reporting standards for the benefits of the users of the financial statements, and Key Audit Matters. In addition, the Audit Committee also held one private meeting with the External Auditor in the absence of the Management to discuss the audit scope, approach, the quality of financial reporting and any challenges that they faced during the course of their audit as well as to see whether there was any suspicious information indicating potential fraud. The External Auditor made no remark and did not find any indications of suspicious incidents.
Review of Related Party Transactions: The Audit Committee regularly reviewed the related party transactions and transactions which potentially conflicted with the Company’s interest based on business normality, transparency, adequate disclosure and at arm’s length. These transactions and information were correctly reviewed and disclosed to the SET in a timely manner.
Review of Risk Management Assessment: The Audit Committee regularly reviewed the appropriateness and effectiveness of the Company’s risk management process which was further strengthened in year 2021. In particular, the Audit Committee reviewed the emerging risks such as fortification of markets in Thailand from new cement capacity in neighboring countries, cybersecurity, increase of input costs etc., all of which were considered risks of significance and potential impact on company performance.
Review of Internal Control System and oversight of Group Internal Audit and Compliance function: The Audit Committee reviewed the results of internal control system together with Group Internal Audit and Compliance Department on a monthly basis, and with Group Chief Executive Officer, Group Chief Finance Officer and External Auditors on a quarterly basis. The internal control system was further strengthened by educating and creating awareness of responsibility and accountability of employees through a structured implementation of IMCs. The Audit Committee reviewed the internal audit mission and rolling 3-year roadmap to bring in best practices and encouraged the internal audit function to transform to be a trusted business partner. The Audit Committee was satisfied that Management had taken appropriate remedial actions on audit observations and recommendations and concluded that the organization’s internal control was adequate and appropriate for its business operations. This corresponded with the External Auditors opinion that there was no material deficiency that might impact the Company’s financial statements. Finally, the Audit Committee reviewed and approved Group Internal Audit and Compliance Annual Plan 2022 including the budget to support the plan.
Review of Compliance: The Audit Committee reviewed the Company’s compliance with the SEC, SET and other relevant laws, regulations and policies related to the Company’s business operations. The Audit Committee reviewed the quarterly compliance dashboard and noted that the Company has carried out initiatives to create a compliance culture via e-learning and “Share and Learn”. In addition to the internal whistleblowing system “INSEE Speak Up” hotline, the Company has extended the system for external parties, through which they may file complaints. The Audit Committee reviewed the results of the investigations and fraud risk assessment as well as the impact of fraud cases in order to prescribe preventive guidelines against potential risks in operational system.
Appointment of the External Auditors for 2022:: 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 2022 with its audit fees for the Board’s concurrence and the shareholders’ approval at the AGM 2022.
In summary, the Audit Committee was of the opinion that the financial statements had been prepared in conformity with financial reporting standards, connected party transactions were at arm’s length with normal business conditions, the risk management, and internal control and internal audit systems were adequate and effective, and that laws and regulations relating to the business were fully complied.
February 3, 2022
For and on behalf of the Audit Committee Siam City Cement Public Company Limited
Chairper of the Audit Committee