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). Mr. Robbert van de Feltz joined as a new member from March 2020 replacing Mr. Pradap Pibulsonggram who retired.
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 2020, 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 in framing its priorities for year 2021.
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 2020 of Siam City Cement Public Company Limited and subsidiaries 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 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.
Review of Connected Transactions: The Audit Committee regularly reviewed the connected transactions and transactions which potentially conflicted with the Company’s interest based on business normality, transparency, adequate disclosure and at arm’s length.
Review of Risk Management System: The Audit Committee reviewed the Company’s risk management system which was further strengthened in year 2020 due to COVID-19. In particular, the Audit Committee reviewed the risks arising from a potential economic crisis risks like liquidity, credit and collection management, impairments, etc. The Audit Committee also reviewed the appropriateness and effectiveness of risk management processes and provided recommendations for improvement.
Review of Internal Control System and oversight of Group Internal Audit and Compliance function: The Audit Committee reviewed the 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. The Audit Committee reviewed the internal audit charter and rolling 3-year road map 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. Finally, the Audit Committee reviewed and approved Group Internal Audit and Compliance Annual Plan 2021 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 e.g. Code of Business Conduct, Insider trading, and Conflict of Interest etc. of all employees, management and directors. The Audit Committee also reviewed the Whistle Blower complaints received through the “INSEE Speak Up” hot line and investigations thereon and provided recommendations on process, internal control and good governance.
Appointment of the External Auditors for 2021: 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 2021 with its audit fees for the Board’s concurrence and the shareholders’ approval at the AGM 2021.
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 4, 2021
For and on behalf of the Audit Committee
Siam City Cement Public Company Limited
Chairper of the Audit Committee