Page 58 - HRC_AR2020

56 I 2020 ANNUAL REPORT I gOvERNANCE

CORPORATE gOvERNANCE OvERvIEW STATEmENT

PRINCIPLE B: EFFECTIVE AUDIT AND RISK II. RISK mANAgEmENT AND INTERNAL CONTROL
mANAgEmENT FRAmEWORK

I. BOARD AUDIT COmmITTEE The Board strives to maintain a sound internal control and
risk management system to ensure a smooth running of
The Chairman of the BAC is Mr Alan Hamzah Sendut, the business. It is the Company’s aim to manage its risks and
an Independent Non-Executive Director who is not the control its business and financial affairs economically, efficiently
Chairman of the Board. The Committee comprises solely of and effectively, so as to be able to deliver profitable business
four (4) Independent Non-Executive Directors with a diverse opportunities in a disciplined way, to avoid or mitigate risks that
mix of skills, knowledge, experience and perspectives in the can cause loss, reputational damage or business failure, and to
areas of accounting, corporate finance, banking, the oil and enhance resilience to external events.
gas industry, strategy, corporate governance and regulatory
compliance, which enables the BAC to discharge its duties. The BRMC provides oversight and direction on risk
management matters to ensure prudent risk management
The BAC members continuously update themselves of the latest over the Company’s business and operations. The Committee’s
developments in accounting and auditing standards, practices functions include ensuring that the Company’s internal control
and rules. The list of training courses attended by the members and risk management framework are periodically evaluated
of the Board, including members of the BAC, can be found on for quality, integrity and effectiveness, a systematic and
page 142 of this Annual Report. comprehensive evaluation of the key risk areas are conducted
The BAC assists and supports the Board’s responsibility of and that controls are in place to mitigate and manage those
overseeing the suitability, objectivity and independence of risks. The implementation of risk controls is monitored and
the Company’s external auditor and internal audit function the results are presented to the BRMC during its meetings.
by ensuring that proper internal controls are implemented to The Chairman of the BRMC is Loy Swee Im, a Non-Independent
enhance the independence of these functions and by providing Non-Executive Director of the Board. The Committee comprises
direction and oversight on behalf of the Board. of three (3) members, two (2) of whom are Independent
The Terms of Reference of the BAC provides that a former Non-Executive Directors.
key audit partner of the external auditor shall be subject to a Further details of the risk management and internal control
minimum of two (2) years cooling-off period before being framework are provided in the Company’s Statement on
appointed as a member of the BAC. At present, none of the Risk Management and Internal Control which is available on
Board members are or have been a key audit partner of the page 58 of this Annual Report.
Company’s external auditor.
The BAC is responsible for recommending to the Board the Internal Audit Function
appointment or re-appointment of the external auditor and the The Chief Internal Auditor reports directly to the BAC, who
associated audit fee after reviewing their suitability, resources, reviews and assess the performance of the internal audit
competency and independence, and any resignation or dismissal function of the Company on an annual basis. The internal audit
of the external auditor and the reasons therefor. charter of the Company’s Internal Audit Department (IAD),

The appointment or re-appointment of the external auditor is which is headed by the CIA, provides that the IAD shall maintain
recommended by the Board in the Company’s annual general its objectivity and independence, at all times, and will have
meeting and the external auditor is ultimately appointed or no direct operational responsibility or authority over any of
re-appointed by shareholders at the meeting. the activities audited. The CIA is also required to confirm the
organisational independence of the IAD to the BAC and the
The external auditor is evaluated on an annual basis in Board annually.
accordance with the Company’s External Auditor Assessment
Policy, which considers the external auditor’s competence, audit Further details of the IAD can be found in the Company’s
quality and independence. Corporate Governance Report 2020, which is published at
www.hrc.com.my.
The BAC’s report is available on page 63 of this Annual Report.