Terms of Reference - Audit Committee
The principal objective of the Audit Committee (or the "Committee") is to assist the Board of Directors (or the "Board") in the effective discharge of its fiduciary responsibilities for corporate governance, financial reporting and internal control.
The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than three (3) members of whom:
(a) Membership of the Committee shall comprise exclusively of Non-Executive Directors.
(b) a majority of the members including the Chairman of the Committee must be Independent Directors.
(c) at least one member of the Committee:
(i) must be a member of the Malaysian Institute of Accountants; or
(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years' working experience and he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967.
(d) fulfills such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad (“Bursa Securities”).
The members of the Committee shall elect a Chairman from amongst their number who shall be an Independent Director. No alternate Director shall be appointed as a member of the Committee.
If a member of the Committee resigns or for any reason ceases to be a member with the result that number of members is reduced below three (3), the Board shall, within three (3) months of that event, appoint such number of new members as may be required to make up the minimum of three (3) members. The term of office and performance of the Committee and each of the members shall be reviewed by the Board at least once every three (3) years.
3 Functions of the Audit Committee
The Audit Committee shall amongst others, discharge the following functions:
(1) To review the following and report the same to the Board:
(a) the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusing particularly on:
(i) changes in or implementation of major accounting policy changes and practices;
(ii) significant and unusual events;
(iii)significant adjustments arising from audit;
(iv) the going concern assumption; and
(v) compliance with accounting standards and other legal requirements.
(b) any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;
(c) with the External Auditors:
(i) the audit plan and audit report;
(ii) their evaluation of the system of internal controls;
(iii) the assistance given by the employees of the Company to the external auditors;
(iv) the management letter and management's response; and
(v) the audit fee and on matter concerning their nomination, appointment and reappointment and other issues and reservations arising from audits.
(2) To recommend and consider the nomination, appointment and reappointment of a person or persons as External Auditors, the terms of reference, audit fees, and any questions of resignation or dismissal;
(3) To discuss with the External Auditors the nature and scope of the audit (before the audit commences) and ensure co-ordination (where more than one audit firm is involve);
(4) To do the following in relation to the internal audit functions: (a) review the adequacy and relevance of the scope, functions, competency and resources of internal audit functions and the necessary authority to carry out its work; (b) review the audit plan of work programme, processes, the results of internal audit programme, processes or investigations undertaken and whether or not appropriate action is taken on the recommendations; and (c) consider the major findings of internal audits and investigations, management's response, remedial actions taken and follow-ups.
(5) To assist the Board in evaluating the adequacy of the Group's risk management framework;
(6) To review reports presented by the Internal Auditor relating to risk management issues and finding, including any proposed remedial actions;
(7) To review the allocation of option granted pursuant to the Employee’s Share Option Scheme; and
(8) To undertake such other functions as may be agreed by the Audit Committee and the Board.
4 Rights of the Audit Committee
The Committee is authorized by the Board wherever necessary and reasonable for performance of its duties:
(a) to investigate any matter within its terms of reference;
(b) have adequate resources required to perform its duties;
(c) have full and unrestricted access to information, records and document relevant to its activities;
(d) have direct communication channels with the External Auditors, Internal Auditor and with senior management of the Group;
(e) to engage, consult and obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if considers necessary;
(f) to convene meetings with the External, the internal auditors or both, excluding the attendance of other Directors and employees of the Company, whenever deemed necessary; and
(g) where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Bursa Securities’ Listing Requirements, the Committee shall promptly report such matter to the Bursa Securities.
(a) The Committee shall meet at least four (4) times in a year and such additional meetings as the Committee shall decide.
(b) Members of the Committee and external auditors may convene a meeting, with at least seven (7) days notices being served, if they consider that one is necessary.
The quorum of meetings of the Committee shall consist of at least two (2) members; the majority of those presents must be Independent Directors.
(a) The Head of' Finance and the Internal Auditor shall normally be invited to attend meetings.
(b) The Representatives of External Auditors shall be invited to attend meetings where matters relating to audits of the statutory accounts and / or the External Auditors are to be discussed.
(c) The Committee may invite other Directors or employees of the Company who the Committee thinks fit and proper to attend its meeting to assist in its deliberations and responsibilities of matters raised.
(d) The Committee shall meet at least annually with the management, and at least twice every year with the Head of Internal Audit and external auditors in separate sessions to discuss any matters with the Committee without the presence of any executive member of the Board.
(4) A notice of meeting shall be distributed to Committee members and other relevant representatives prior to the meetings.
(5) In addition to the availability of detailed minutes of the meetings to all Board members, the Committee at each Board meeting will report a summary of significant matters and resolutions.
(6) The Chairman shall submit an annual report to the Board summarising the Committee’s activities during the year and the related significant results and findings.
(1) The Company Secretary shall act as Secretary of the Committee and shall be responsible, concurrence of the Chairman, for drawing up and circulating the agenda and the notice of meeting together with the supporting explanatory documentation to members prior to each meeting.
(2) The Secretary of the Committee shall be entrusted to record all proceedings and minutes of all meetings of the Committee.
(3) The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Committee members and the other members of the Board.
The Committee may regulate its own procedure, in particular:
(a) the calling of meetings;
(b) the notice to be given of such meetings;
(c) the voting and proceedings of such meeting;
(d) the keeping of minutes; and
(e) the custody, production and inspection of such minutes.