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64 I 2020 ANNUAL REPORT I gOvERNANCE

AUDIT COmmITTEE REPORT

ACTIvITIES OF ThE BAC On 25 February 2021, the CIA reported that non-audit fees
incurred in 2020 amounted to RM154,525, constituting
The BAC holds the overall responsibility for monitoring HRC’s approximately 27 per cent of the total remuneration of
management of financial risk processes, accounting and RM574,525 to the External Auditors for 2020.
financial reporting practices and ensuring the adequacy and
effectiveness of internal controls. The BAC has assessed and is satisfied with the competency,
audit quality and independence of PwC, whose appointment
The BAC’s key activities for the financial year ended was approved by shareholders of the Company at
31 December 2020 comprised the following: HRC’s 61 st Annual General Meeting. The assessment
was conducted based on the criterias stipulated in HRC’s
1. Financial Reporting
External Auditor Assessment Policy, which was approved
In overseeing HRC’s financial reporting, the BAC reviewed by the Board on 29 March 2019.
the quarterly financial statements for the fourth quarter
of 2019 and the annual audited financial statements 3. Internal Audit
for 2019 at its meetings on 17 February 2020 and The IA team conducted the audit work as per the 2020
20 March 2020, respectively. Annual Audit Plan approved by the BAC on 21 November

The quarterly financial statements for the first, second and 2019.
third quarters of 2020, which were prepared in compliance In year 2020, the internal audit function of HRC is
with the Malaysian Financial Reporting Standard (MFRS) monitored by the BAC and consists of two segments:
134 Interim Financial Reporting, International Accounting
Standard (IAS) 34 Interim Financial Reporting and (1) An Internal Audit Department (IAD), which acts as an
paragraph 9.22, including Appendix 9B, of the MMLR, independent evaluating body to assist and provide
were reviewed at the BAC meetings on 15 June 2020, assurance to the Board, the BAC and Management
17 August 2020 and 25 November 2020, respectively. of HRC. The IAD is headed by the CIA who reports
functionally to the Chair of the BAC and administratively
On 25 February 2021 and 26 March 2021, the BAC reviewed to the CEO. There are two (2) Internal Auditors who
the quarterly financial statements for the fourth quarter report to the CIA. The internal auditors have sufficient
of 2020 and the annual audited financial statements for mix of knowledge, skills and competencies to execute
2020 respectively. the audit plan. Effective 1 November 2020, one (1)
The BAC’s recommendations were presented for approval of the Internal Auditors was transferred to support the
at the subsequent Board meetings. Risk & Integrity Department following the resignation of
the Risk & Integrity Officer; and
2. External Audit
(2) HRC’s Site Internal Assurance (SIA), which comprises
The BAC reviewed PwC’s audit plan and scope for the 38 trained and / or ISO certified site internal auditors
financial year ended 2020 and the payment of auditors’ from various departments of HRC. The SIA carries out
statutory and non-audit fees. the site internal audits and process effectiveness of
HRC and reports to the Quality, Health, Security,
Results of PwC’s annual audit and audit findings together Safety and Environment Manager. All SIA internal audit
with recommendations and Management’s response were reports are reviewed by the CIA before finalisation.
reviewed by the BAC. Matters included in the Management
representation letter were also reviewed by the BAC. IAD activities are reported to the BAC on a quarterly basis,
while SIA overall activities are presented to BAC annually,
In addition to the review of the annual audit of HRC’s at the end of each financial year.
financial statements, the External Auditors were engaged
to conduct reviews of selected quarterly financial results Urgent issues arising from the internal audit processes are
during 2020 in accordance with the International Standard highlighted to the Management promptly.
on Review Engagements 2410 “Review of Interim Financial The total costs incurred by the internal audit function
Information Performed by the Independent Auditor of the of the Company for the financial year under review was
Entity” which were reported and reviewed by the BAC.
RM753,156.