About PTTEP

Audit Committee Charter (Revision No.12)

Table of Contents

1. Objectives
2. Definition
3. Compliance with Applicable Requirements and Laws
4. Appointment
5. Qualifications of the Committee Members and Prohibited Characteristics
6. Duties and Responsibilities
7. Term of Service and Remuneration
8. Meetings
9. Reporting
10. Secretary of the Audit Committee
11. Effective date

1. Objectives

PTT Exploration & Production Public Company Limited (PTTEP) has a strong determination to maintain appropriate management with the highest effectiveness and efficiency.  PTTEP has to be accepted by the shareholders and stakeholders as a Company with Good Corporate Governance.

The appointment of the Audit Committee is a part of PTTEP’s Good Corporate Governance. It is an important tool to alleviate the Board’s responsibility in order to monitor a smooth management, a vision and forthright opinions related to PTTEP’s financial reports, internal controls and internal audits.

2. Definition

2.1	“PTTEP” means PTT Exploration & Production Public Company Limited which is a listed company.
2.2	“Board” means Board of Directors of PTT Exploration & Production Public Company Limited.
2.3	Independent Director means Independent Director of PTT Exploration & Production Public Company Limited as described in Good Corporate Governance and Business Ethics of PTTEP.
	Independent directors: Reviewing and verifying their independence at least once a year.
2.4	“SET” means The Stock Exchange of Thailand.
2.5	“SET Rules” means Regulations, Notifications, Orders, Best Practices Guidelines, Governing Procedures, Statements or circulating letters by the Board of Governors or of SET that PTTEP has to comply with.

3. Compliance with Applicable Requirements and Laws

To adopt valid SET rules and other laws related to the Audit Committee including any revisions to apply together with the present Audit Committee Charter. 

4. Appointment

The Board appoints the Audit Committee which is composed of three directors at the minimum and five directors at the maximum.  And at least one audit committee member must have knowledge, understanding or experience in accounting or finance.

The Board will appoint the Audit Committee’s Chairman and the Audit Committee appoints the Head of the Internal Audit or Corporate Secretary to be the Secretary of the Audit Committee.  

The Board reports the appointment of the Audit Committee or changes of the Audit Committee members to the regulating ministry of the Company’s parent company and the Ministry of Finance within 30 days from the date which the Committee has been appointed or any change was made.

5. Qualifications of the Committee Members and Prohibited Characteristics

5.1	Qualifications of the Committee Members A Committee Member must possess qualifications in accordance with the criteria as follows:
	(1)	Being the Board member and not being the Chairman of the Board or the Chief Executive Officer of PTTEP;
	(2)	All members must be Independent Directors;
	(3)	Be able to devote time to perform duties and give opinions with independence and fairness as well as report on the performance of the duties delegated by the Board;
	(4)	To understand PTTEP's mission;
	(5)	To have knowledge and work experience that is sufficient to perform the duties of the Committee. At least one committee member must have knowledge, understanding or experience in accounting or finance, in order to review credibility of the financial statements. The company must indicate such Committee member in the registration statement, Form 56-1 One Report. And that Committee member must specify such qualifications in the Certificate and Biography of the Audit Committee Member (F24-2 form) that must be submitted to the SET.
5.2	Prohibited Characteristics A Committee Member must not have any prohibited characteristics in accordance with the criteria as follows:
	(1)	Not being a government official holding a position in the regulating ministry of the Company’s parent company;
	(2)	Not being a director assigned by the Board to take part in the business decision of PTTEP, its parent company, subsidiary companies, associated companies, same-level subsidiary companies, major shareholders, or controlling persons of the Company;
	(3)	Not being the director of the Company’s parent company, subsidiary company, or same-level subsidiary company of listed companies only;
	(4)	Not being an ascendant, descendant or spouse of the Board, Chief Executive Officer, Head of Internal Audit, or internal auditors of the Company.

6. Duties and Responsibilities

6.1	The Audit Committee has the duties as follows:
	(1)	To establish the audit committee charter compatible with the Company’s scope of work and responsibilities. The charter must be approved by the Board and revised at least once a year.
	(2)	To review the Company’s financial reports with the external auditor on a quarterly basis to ensure accuracy, credibility and adequacy.
	(3)	To ensure that the Company’s activities are performed in compliance with the Securities and Exchange law, SET requirements, other laws, regulations, procedures, cabinet resolutions related to the business, including the Company’s rules and regulations.
	(4)	To review connected transactions or transactions with potential conflicts of interest to ensure that these transactions comply with the laws and SET’s regulations and that they are reasonable as well as in the best interests of the Company, and review transactions with potential fraud which may affect the Company’s operations.
	(5)	To review the efficiency and effectiveness of internal controls, risk management, and governance processes.
	(6)	To oversee and monitor the internal audit process to ensure that the process is appropriate and efficient as well as ensure independence of the Internal Audit Division in order to enhance internal audit performance.
	(7)	To evaluate Internal Audit Division performance including audit problems and difficulties at least once a fiscal year and report the results and its suggestions for improving performance to the Board.
	(8)	To consider, select and propose the appointment including removal of an external auditor, and to propose the auditor’s remuneration to the Board as well as attend a meeting with the external auditor from the State Audit Office of the Kingdom of Thailand (SAO) or the external auditor endorsed by SAO at least once a year, in the absence of the management, to review audit findings and other issues, and recommend reviews or audit of any items, if necessary.
	(9)	To endorse appointment, transfer, removal, promotion, and performance appraisals of the Head of the Internal Audit Division by seeking comments from the Chief Executive Officer. The Audit Committee will appoint an investigation committee to investigate the case that the Head of the Internal Audit division is suspected of noncompliance with laws, the Company’s rules and regulations, and the Good Corporate Governance and Business Ethics of PTTEP Group.
	(10)	To approve a risk-based internal audit plan and instruct internal auditors to conduct other duties as appropriate, taking into consideration the company's benefits as well as the impact on independence and objective of the audit.
	(11)	To endorse the budget, division structure and manpower of the Internal Audit Division for the management to propose to the Board.
	(12)	To approve the charter of the Internal Audit Division.
	(13)	To approve the Conflict of Interest Declaration Form when the Head of the Internal Audit Division has to personally conduct audit field work.
	(14)	To endorse the results of audits which were approved in the annual audit plan as well as special audit requests.
	(15)	The Chairman of the Audit Committee or a member must attend the shareholders’ meeting to answer questions in regard to the Committee’s duties or the appointment of the external auditor.
	(16)	To review the accuracy of self-assessment and related documents in regard to anti-corruption measures in reference to Thailand’s Private Sector Collective Action Coalition Against Corruption (CAC).
	(17)	To perform other duties as assigned by the Board upon its consent.
	(18)	To report the Audit Committee’s performance on internal audit to the Board at least on a quarterly basis, within 60 days from the end of each quarter, except for the fourth-quarter report, which is required as an annual report. Such reports must be submitted to the regulating ministry of the Company’s parent company and the Ministry of Finance within 90 days from the end of the accounting year for acknowledgment.
		The committee’s annual report must also be disclosed in the Company’s annual report, which must be signed by the audit committee’s chairman and consist of at least the following information:
		(a)	an opinion on the accuracy, completeness and creditability of the Company’s financial report,
		(b)	an opinion on the Company’s risk management, fraud risk management and adequacy of internal control systems including internal controls related to financial objectives,
		(c)	an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to the Company’s business,
		(d)	an opinion on the suitability of an auditor,
		(e)	an opinion on the transactions that may lead to conflicts of interest,
		(f)	the number of the audit committee meetings, and the attendance of such meetings by each committee member,
		(g)	an opinion or overview comment received by the audit committee from its performance of duties in accordance with the charter, and
		(h)	other transactions which, according to the audit committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors.
6.2	In order to perform the duties according to the Article 6.1, the Audit Committee may seek independent opinion from any other professional counselor when it is deemed necessary, including the training and development of the committee members for the knowledge related to the company’s activities. PTTEP is responsible for those expenses.
6.3	The Audit Committee is responsible directly to the Board in accordance with the duties and responsibilities assigned in the Articles 6.1 and 6.2 by the Board, while the responsibilities for all activities of PTTEP towards third persons are still vested in the entire Board.
	The Company must submit a notification of the changes in the scope of duties and responsibilities of the Audit Committee to the SET pursuant to the Form to Report on names of Members and Scope of Work of the Audit Committee (F24-1 form) within three working days.

7. Term of Service and Remuneration

The term of service of a Committee Member is equivalent to the director’s Board term.

In case of any Committee Member’s vacating from Office or any unavailability before the expiration of his term of service, the Board must appoint another Audit Committee Member who is fully qualified to replace the resigning member not later than 3 months as of the date of incomplete composition of the Audit Committee.

Upon the expiration of the term of service, if there is no appointment of a new Audit Committee Member, the resigning member has to standby to perform the duties required until the arrival of a new Audit Committee Member.

The resigning Committee Members may be re-appointed for another term.

Besides the vacating from office by expiration of term of service, the Audit Committee member has to resign once he/she cannot possess the qualification in accordance with Article 5.

The Audit Committee will receive an appropriate remuneration approved by the Shareholders Meeting for his duties and responsibilities and PTTEP has to disclose that remuneration in its annual report too.

8. Meetings

The frequency of the meetings is at least on a quarterly basis.

The Audit Committee should attend a meeting with PTTEP executives, internal auditors and external auditors at least once a year.

The Audit Committee fixes the number of members required to attend a meeting to make it valid by not less than two-thirds of the Committee Members.  If the Chairman is absent, the attending committee members have to choose one Committee Member to serve as Chairman of the meeting.

The voting in the meeting is exercised by a majority.  A Committee Member has a casting vote. If the votes are equal, the Chairman will have an additional vote which becomes final and decisive.  The Secretary of the Audit Committee has no right to vote.

Any Committee member who has any personal interest or any conflict of interest in a matter being considered must inform the meeting and abstain from expressing an opinion and voting on the issue and leave the meeting room. An exception can be made if the other Committee members vote unanimously to allow such Committee member to stay in the meeting room to provide information on the issue so that the Board can deliberate on the issue thoroughly. However, such Committee member is not allowed to vote or make a decision on the issue.

The Audit Committee has an authority to invite the management, the external auditor or any other concerned parties or other appropriate persons to participate or to explain any specific subjects in the meeting.

9. Reporting

9.1	The Audit Committee must report to the Board the result of the meeting or the other necessary reports so that the Board is kept regularly informed.
9.2	In case that the Audit Committee finds or suspects anything which has material impact on the financial condition or results of the Company’s operations, the Audit Committee must report it to the Board, so that it can be rectified it within a reasonable period.
	(1)	Report on conflict of interest
	(2)	Fraud or irregularity or material defect in the internal control system
	(3)	Infringement of law related to the Securities and Stock Exchange, SET Rules or laws related to PTTEP’s business

The Board shall report the implementation of the Audit Committee's recommendation to the regulating ministry of the Company’s parent company and the Ministry of Finance at least once a year

If the Audit Committee finds that such rectification has been unreasonably ignored in accordance with item 9.2, a Committee Member must report such finding mentioned in that item to the Office of Securities and Exchange Commission or the SET.

10. Secretary of the Audit Committee

The Secretary of the Audit Committee has the following duties:

(1)	To carry out all activities related to Audit Committee and liaise with all internal and external concerned parties in order to ensure that the Audit Committee’s activities are completed.
(2)	To develop the information and data for the Audit Committee’s decisions so that the Audit Committee’s activities are efficient. Any information related to the Audit Committee will be also disclosed appropriately.
(3)	To set the standards, guidelines and procedures regarding the submission of any agenda items to the Audit Committee, its meeting and its resolutions.
(4)	To study and make analyses from all information/data in order to propose any agenda items to the Audit Committee. This includes any queries or additional information from concerned parties to support the meeting in order to help the Audit Committee’s Chairman or the Audit Committee deliver any resolutions/instructions. Those resolutions/instructions will be informed to all concerned parties accordingly.
(5)	To carry all meetings’ activities, to prepare complete and correct resolutions of the Minutes of the Audit Committee and also to give answers to any questions related to Audit Committee’s resolutions.
(6)	To work together with or to support the other related working units or to perform all other duties which are additionally assigned.

11. Effective Date

This Charter took effect on 17 December 2021.

The Audit Committee Report

PTTEP is determined to conduct our E&P business under the strategic direction to achieve sustainable growth and energy transition by emphasizing the importance of transparency, fairness, and good corporate governance as well as benefits for the shareholders and stakeholders.

The Audit Committee and the Internal Audit Division, in line with this direction, are appointed by the Board to govern, oversee and review the Company’s processes and their conformity to the Good Corporate Governance and Anti-Corruption policy, ensure that the Governance, Risk management, and Compliance (GRC) management remains effective as well as closely monitor the Company’s work processes and goals as we strive towards a sustainable future and aiming to address future challenges and continuously create shared values to stakeholders.

The Audit Committee consisted of 4 independent directors. Ms. Penchun Jarikasem was the Chairman of the Audit Committee. Mr. Dechapiwat Na Songkhla, Mrs. Angkarat Priebjrivat and Mr. Teerapong Wongsiwawilas were members of the Audit Committee. All directors had sufficient knowledge and experiences to review the accuracy and reliability of the financial statements.

In 2022, The Audit Committee executed its Board-assigned duties and those under its own charter, which agreed with best practices and related laws & regulations. The meetings were held 14 times including a co-meeting with the Risk Management Committee, when all the directors had attended all the meetings. In December 2022 Audit Committee Meeting also include the agenda with the Chief Executive Officer (CEO), the Company’s internal and external auditors to discuss altogether.

The Committee’s activities in 2022 according to the Audit Committee Charter were summarized as follows:

1)  Review of Financial Reports

The Committee reviewed the Company’s quarterly and annual financial statements with the auditor (PricewaterhouseCoopers ABAS – PwC) without the presence of the Management, to independently discuss about significant event that arise in each accounting period, independence in performance of duties, auditor’s opinion, update of accounting standard and also discuss any impact which may have on the Company’s financial reporting. The review is to ensure that the Company’s financial reporting is accurate and reliable, the statements disclosed complete, sufficient, and timely information and complied with all relevant laws and regulations as well as generally accepted accounting standards. The Committee also provided recommendations regarding the Company’s Management’s Discussion and Analysis (MD&A) to cover an analysis of the relevant factors affecting the Company’s operation and financial statements.

2)  Review of the Internal Control System and Risk Management

The Committee reviewed the efficiency and effectiveness of the Company’s internal control system through the audit results reporting by Internal Audit Division and also endorsed the assessment results of the Company’s internal control system including an assessment questionnaire required by the Securities and Exchange Commission of Thailand (SEC), which found that the Company had a proper internal control system. This included internal control related to financial objectives and processes with high fraud risk. The Company also improved internal control continuously to align with its operations, objectives and relevant laws and regulations as well as had sufficient controls on subsidiaries.

The Committee reviewed the effectiveness of risk management through acknowledgement of the Company’s risk management report as presented to the Board of Directors meeting, together with the review of significant risk reporting in audit reports of the Internal Audit Division. In addition, there was the meeting with the Risk Management Committee to share information to ensure that the audit plan cover major risks and align with dynamic risks.

3)  Review of Connected Transactions or Transactions with Potential Conflicts of Interest

The Committee reviewed the connected transactions or transactions with potential conflicts of interest prior to the Board’s consideration to ensure that they were reasonable and beneficial to the Company and to safeguard the benefits of minority shareholders.

For connected transactions with the parent company, which are Petroleum Sales Agreement, the Committee consider the negotiation transparency, pricing, and contract duration to ensure the reasonableness of the transactions. The joint venture companies which are third parties have also reviewed the conditions of such transactions.

The Committee also reviewed the disclosure of the transactions in the annual report and viewed that the transactions were correctly and completely disclosed as well as the prices and conditions were fair. Moreover, the transactions were appropriately approved by the management or the Board of Directors prior to their commencement.

4)  Review of Compliance with related Laws and Regulations

The Committee reviewed the PTTEP Group’s compliance with the Securities and Exchange laws, SET’s Regulations, and/or other related laws, both Thai laws and the laws of other countries in which the PTTEP Group operates or invests. Moreover, the Committee acknowledged the compliance report prepared by Compliance Function, in addition to the audit results related to compliance with related laws and regulations which is reported by the Internal Audit Division. The Committee also recommend additional relevant action plans and followed up on the progress of those action plans.

5)  Oversight of Internal Audit Activities

The Committee reviewed and approved annual audit plan, long-term audit plan, and audit results as well as followed up on the progress of action plans in response to audit findings. The Committee also reviewed the performance against the audit plan, the independence of auditors, key performance indicators of the Internal Audit Division, and assessed the performance of Head of the Internal Audit Division. Moreover, the Committee reviewed the Audit Committee Charter and Audit Charter on an annual basis.

The Committee gave precedence to digital technologies and promoted the adoption of it in the audit process. This enabled audit work to adapt to transformation in the digital era, additionally, supported audit work to be more accurate, complete, and efficient as well as better analysis which led to precise and timely problem-solving. The example was the implementation of the Continuous Control Monitoring System on Procure to Pay Process and Warehouse and Inventory Management Process. The Internal Audit Division fully utilized the Audit Management System (TeamMate+) which assist audit process from the audit planning process to the audit issues follow up process (end to end process). In 2022, Internal Audit Division also enhanced Follow up Dashboard to facilitate management in monitoring the outstanding audit issues.

The Committee promoted personal development of internal audit staff especially training in digital technologies to adopt in audit work and ensure that internal audit activities are appropriate and effective. The Committee also supported Consulting Services role of Internal Audit Division in order to add long-term value to the Company and fulfill stakeholders’ expectation. 

6)  Nomination of the External Auditor for 2022 and Meeting with the External Auditor

The State Audit Office of the Kingdom of Thailand (SAO) requested the Company to outsource the external auditor in accordance with the State Fiscal and Financial Disciplines Act, B.E. 2561 (2018), Section 71, requiring the SAO or the external auditor endorsed by the SAO to audit the financial reports of the government agency. The Company then proposed Ms. Amornrat Pearmpoonvatanasuk, Certified Public Accountant Registration No. 4599 or Mr. Boonrueng Lerdwiseswit, Certified Public Accountant Registration No. 6552 or Mr. Kan Tanthawirat, Certified Public Accountant Registration No. 10456, the auditors from PricewaterhouseCoopers ABAS Limited (PwC), to serve as the Company’s external auditor. The Committee considered that PwC is a leading company with reliable performance and independence; furthermore, the audit fee is reasonable. Therefore, the Committee agreed to propose PwC to be the Company’s external auditor together with its audit fees to the Board, SAO and the 2023 Annual General Meeting for further consideration and approval.

In addition, the Committee met with the external auditor to acknowledge the audit plan and observations as well as key audit matters in the auditor’s report, and also met separately with the external auditor in the absence of the management to acknowledge additional opinions from the auditor.

The Committee also considered non-audit services transactions engaging the company and its affiliated which the external auditors worked for. This is to ensure the external auditor's independence. Additionally, the Committee had an opinion on clear disclosure of non-audit fee in the annual report so that shareholders can obtain the information.

7)  Oversight of Good Corporate Governance and Fraud Prevention

The Committee encouraged the improvement of the Company’s internal control system to ensure optimal control over fraud prevention. For example, the Committee promoted procurement through a competitive bidding process and supported the use of analysis of past procurement reports for preparing annual procurement plans in advance. As a result, the proportion of bidding transactions is continuously higher than direct negotiation transactions every year. The Committee also encouraged staff whistleblowing, which allowed a person to raise a suspicious misconduct or a potential fraud. In addition, the Committee was responsible for verifying the results of the Company’s self-assessment relating to the anti-corruption process required by CAC and the Corporate Governance Code for Listed Companies (2017). The Company is also a certified member of Thai Private Sector Collective Action against Corruption (CAC), reflecting our determination to stand strongly and prominently against corrupt practices.

In conclusion, in 2022, the Committee conducted its work thoroughly, methodically, and strictly according to the Audit Committee Charter and reported the results of all meetings to the Board on a regular basis. The committee provided opinions and recommendations that enhanced the Company’s good corporate governance. This approach ensures that the Company is able to deliver the best possible performance in comparison with our industrial peers.

In addition, the Committee is confident in the competency of the Internal Audit Division, which consists of personnel with various qualifications, skills, and experiences, enabling them to perform their duties in auditing to cover various aspects efficiently.

The Committee’s overall opinion regarding the work in 2022 is that the Company’s financial reports were accurate, in compliance with generally accepted accounting standards and with International Financial Reporting Standards. The Company also conducted the operations in compliance with the relevant laws and obligations. In addition, the Company has proper risk management, fraud risk management, internal controls, internal audit, and corporate governance.

The Committee’s performance was graded “Very Good” by themselves, the Board of Directors, and related agencies.

 
   Penchun Jarikasem
(Ms. Penchun Jarikasem)

Chairman of the Audit Committee