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Financial Reports &
Governance Other Information HENGYUAN REFINING COMPANY BERHAD l ANNUAL REPORT 2023 69

PRINCIPLE B: EFFECTIVE AUDIT AND RISK The Board has adopted the Non-Audit Services Policy which
MANAGEMENT sets out the non-audit services that can be rendered by the
external auditor and its affiliates, and the limitation of fees for
I. BOARD AUDIT COMMITTEE such non-audit services, which have been endorsed by the BAC.

The Chairman of the BAC is Alan Hamzah Sendut, The BAC is responsible to ensure that the non-audit services
an Independent Non-Executive Director who is not the Chairman rendered by the external auditors has taken into account
of the Board. With the resignation of Puan Fauziah Hisham, the nature and extent of the non-audit services and the
the BAC comprises solely of three (3) Independent appropriateness of the level of fees. In order to prevent
Non-Executive Director with a diverse mix of skills, knowledge, situations where the external auditor unintentionally takes on
experience and perspectives in the areas of accounting, management responsibilities while providing non-audit
corporate finance, banking and international finance, oil and services, which could be a violation of the external auditors’
gas, strategy, risk management, corporate governance and independence obligations.
regulatory compliance, which enables the BAC to discharge its The results of BEA FY2023 indicate that the BNRC and the
duties efficiently.
Board are satisfied that the current composition of the BAC
The BAC members continuously update themselves of the provides an appropriate size, diversity, mix of skills and
latest developments in accounting and auditing standards, qualifications, knowledge and experience to discharge their
practices and rules. The list of training courses attended by duties effectively, and all directors are financially literate and
the members of the Board, including members of the BAC, able to understand matters under the purview of the BAC,
can be found on page 155 of this Annual Report. including the financial reporting process.

The BAC assists and supports the Board by monitoring the The BAC’s report is available on page 78 of this Annual Report.
suitability, objectivity and independence of the Company’s
external auditor and internal audit functions. The efficiency II. RISK MANAGEMENT AND INTERNAL CONTROL
and effectiveness of the Company’s Control Framework and FRAMEWORK
internal control system has been reviewed and endorsed by
the BAC based on the assurance provided by the external The Board strives to uphold a strong and sound internal control
and internal auditors. Audit issues tabled by the auditors and and risk management system to ensure smooth operation
actions taken by Management to address the issues were of the business. It is the Company’s aim to manage its risks and
deliberated during the BAC meetings. to control its business and financial affairs economically,
efficiently and effectively, so as to be able to deliver profitable
In line with Practice 9.2 of the MCCG, Paragraph 2.7 of the business opportunities in a disciplined manner, to avoid or
BAC’s TOR clearly stated that a former partner of the external mitigate risks that could results in loss, harm to reputation
audit firm and/or the affiliate firm (including those providing or business failure, and to enhance ability to withstand
advisory services, tax consulting, etc) of the Company unexpected events.
shall be subject to a minimum of at least three (3) years
cooling-off period before being appointed as a member of the The BRMC oversees and provides guidance on risk
BAC. At present, none of the members of the BAC are the management matters to ensure prudent risk management
former partner of Messrs PricewaterhouseCoopers PLT. over the Company’s businesses and operations. The Company
has adopted a Risk Management policy to provide practical
The BAC is responsible for recommending to the Board the guidance for addressing the risk and opportunities and to
appointment or re-appointment of the external auditor and carry out risk assessment.
the audit fee after reviewing their suitability, resources,
competency and independence, and any resignation or dismissal The BRMC also ensures that the Company’s internal control
of the external auditor and the reasons therefor. and risk management framework are periodically evaluated
for quality, integrity and effectiveness, a systematic and
The external auditor is evaluated on an annual basis in comprehensive evaluation of the key risk areas are conducted,
accordance with the Company’s External Auditor Assessment and that controls are in place to mitigate and manage these
Policy, which considers the external auditor’s competence, risks. The implementation of risk controls is monitored,
audit quality, independence and information contained in the and the results are presented to the BRMC during its meetings
external auditor’s annual transparency report. The BAC also quarterly.
obtains written assurance from the external auditor that they
have complied with the relevant ethical requirements regarding
professional independence.