(Mr. Chainoi Puankosoom)
Chairman of the Board
To Shareholders of Frasers Property (Thailand) Public Company Limited
The Audit Committee of Frasers Property (Thailand) Public Company Limited was established by the Company’s Board of Directors. It comprises of well-qualified professionals with solid background and experience in accounting, finance, business administration and law.
The Company’s Audit Committee Members are independent and qualified to review the reliability of financial reports according to the requirements of the Stock Exchange of Thailand (SET). Currently, the Audit Committee has three members.
On 25th January 2019, The Board of Director appointed Associate Professor Tithiphan Chuerboonchai, a member of Audit Committee, to be its Chairman replacing Mr. Threekwan Bunnag who resigned from his directorship and consequently relinquishing his post as Chairman of the Audit Committee.
At present, the Audit Committee comprises of Associate Professor Tithiphan Chuerboonchai (Chairman)and Mr. Chainoi Puankosoom and Mr. Chatchaval Jiaravanon (Members)
The Audit Committee has completely and independently performed its duties in accordance with the Charter of the Audit Committee, which was reviewed in 2019 according to the requirements of the Stock Exchange of Thailand. In discharging its mandate, the Audit Committee puts emphasis on compliance with the principles of good corporate governance, having a good internal control system and promoting a preventive inspection approach which covers risk management and protection of all stakeholders’ interests on an equal footing basis.
The aforementioned meetings were conducted on a platform of mutual understanding and constructive discussion among the management, internal auditor, and external auditor. The scope of discussion includes review of information, sharing of opinions, and productive engagement with a view to determining the adequacy and effectiveness of the internal control system and procedures, reliability of financial reports, compliance with laws and regulations related to the Company’s operations, as well as reviewing the Connected Transactions or transactions that appear to have conflicts of interest.
The tasks performed by the Audit Committee include, but are not limited to, meeting with the external auditor without the presence of management to ensure that the external auditor has the autonomy to determine the scope of annual audit framework free of interference from from management.
Below is a summary of the year-to-date performance of the Audit Committee in the year 2019:
1) Review of Financial Reports:
The Audit Committee reviewed pertinent information of the Company’s quarterly and annual financial statements as of September 30, 2019 and its subsidiaries, which have been reviewed and audited by the external auditors of the Company together with the management and internal auditors. The scope of review includes issues related to important accounting policies and principles, changes over the past year, potential future impact, material extraordinary transaction, comments by external auditors and internal auditors. The Audit Committee is of the opinion that the Company’s financial statements and its subsidiaries for the year ended 30 September 2019 were presented in a fair and reasonable manner and in accordance with generally accepted accounting principles. Appropriate accounting policies are applied consistently with adequate disclosure in compliance to the laws and relevant regulations.
2) Review of Adequacy of Internal Control System:
The Audit Committee reviewed the results of internal control system of the Company on a quarterly basis, including review of the adequacy of internal control system according to the evaluation framework laid down by the Securities and Exchange Commission (SEC) which serves as an assessment guideline. The committee is of the opinion that the internal control system of the Company is appropriate and effective enough to conduct business transparently.
3) Review of Compliance:
The Audit Committee has taken steps to ensure that the Company, and its affiliates to comply with all applicable laws, regulations, policies; and operate all kinds of activities legally under the Securities and Exchange Act and all the rules and regulations issued thereunder by the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET), as well as all other applicable laws relating to the business of the Company. There was no indication to believe that the Company had deficiencies related to non-compliance and / or violation of rules, regulations, and related laws.
4) Nomination of the Auditor for 2019:
The Audit Committee selected and appointed the External Auditor by considering the appropriateness of their qualifications and their independence, assessed the reasonableness of their proposed compensation. After careful review, the Audit Committee submitted its recommendation to the Board of Directors, and obtained the latter’s approval at the 2019 Shareholders Meeting on 25 January 2019 to appoint Ms. Nittaya Chetchotiros, CPA License No. 4439 or Ms. Sureerat Thong-arunsang, CPA License No. 4409 from KPMG Phoomchai Audit Limited as the Company’s external auditors to certify the Company’s financial report of the year 2019.
5) Review Connected transactions or Transactions with Possible Conflicts of Interest:
The Audit Committee has reviewed the Connected transactions or the transactions that may lead to conflicts of interest which must comply with the laws and regulations of the Stock Exchange of Thailand regarding disclosure of information and practice of listed companies in Connected Transactions that may cause conflicts of interest. The Audit Committee is of the opinion that the Connected Transactions approved were deemed beneficial to the Company. All significant Connected Transactions or the transactions that appear to have conflicts of interest this year had been considered by the Audit Committee with its opinion explicitly given before it proposed for approval to the Board of Directors. In some cases, the Board of Directors proposed that the Connected Transactions be submitted for approval to Shareholder Meeting instead after careful review of the size of the transactions. The case in point is the acquisition of the Golden Land Property Development Public Company Limited. The Audit Committee proposed to the Board of Directors that this Connected Transaction be submitted to the Shareholders’ Meeting for approval. The Directors and Shareholders with potential conflicts of interest are not allowed to vote on these transactions. The Connected Transactions had been disclosed accurately and completely. Moreover, in case the Audit Committee does not have the expertise to consider the related party transactions, the Company will retain an independent appraiser to ensure that such transactions are fair and beneficial to the Company before such transactions are submitted for consideration to the Audit Committee, the Board of Directors and shareholders.
The Audit Committee had previously given its opinion that the connected party transactions must be undertaken in the ordinary course of business, involve no conflicts of interest, equitably, with acceptable rationality and no irregularity, and with fair and full disclosure of information.
6) Review and Monitor the Performance of Internal Audit:
The Audit Committee has performed its duties as stated in the revised Audit Committee Charter by ensuring that the Company has appropriate internal control system to govern an effective internal audit operation in accordance with international standards and procedures.
The Audit Committee shall consider and approve audit plan of the internal audit for the year 2019 which was prepared in accordance with the results of the corporate risk assessment, inclusive of determining the importance of each system to meet business goals of the organization under changing circumstances, reviewing internal control system for independence and scope of operation, along with executing according to the recommendations in the quarterly internal control assessment report, as well as providing recommendations to the Internal Audit Department to achieve the goals set by the audit plan assigned by the Audit Committee.
The Audit Committee reviewed the audit results of the internal control system according to the annual audit plan, including the Treasury process, Human Resource Management process, Real Estate Investment Trust Management process, Acquisitions of New Business, Divestments of Investment Properties to Frasers Trust Real Estate Investment Trust processes and Pre-Implementation of the Enterprise Resource Planning process under SAP System.
The Audit Committee is responsible for evaluating the performance of the Chief Internal Audit and overall Internal Audit Department in the year 2019, approving the appointment, transferring and allocating manpower of the Internal Audit Department as deemed suitable, along with supporting competency development and advancement of internal audit profession.
7) The Audit Committee’s Performance Reports to the Board of Directors:
The Audit Committee has reported its performance together with the review of the financial statements presented to the Board of Directors at least once a quarter, as well as preparing the Audit Committee’s report to be disclosed in the Annual Report for the year 2019 in accordance with the regulations of the Stock Exchange of Thailand. If there are any suspicious transactions or actions that may have a significant impact on the Company’s financial position and operating results, the Audit Committee will propose to the Board of Directors for acknowledgment. During the past year, there has been no event or situation indicating that such event occurred.
To conclude the year 2019 overview, the Audit Committee performed its duties independently with knowledge, competence, prudence and caution to comply with the scope and responsibilities specified in the Charter of the Audit Committee, and protect the interests of all stakeholders on an equal basis. The Committee was of the opinion that the Company and its affiliates’ financial reports were accurate, reliable, with adequate information disclosure in accordance with the generally accepted accounting principles. Besides, the Company has implemented a sufficient, appropriate, and effective internal control and audit system based on international standard. For the Connected Transactions or transactions that may lead to conflict of interest, the Company has strictly complied with the laws and regulations of the Stock Exchange of Thailand, with procedures for controlling and monitoring operations in compliance with the Securities and Exchange Act, regulations, and other laws related to the business of the Company.