Audit Committee (Terms of Reference)

Objectives

The principal objective of the Audit Committee (“the Committee”) is to assist the Board of Directors (“the Board”) in fulfilling its oversight responsibilities in the areas of:

  • financial reporting, disclosure, and transparency;
  • risk management and internal control;
  • sustainability governance; and
  • accountability and integrity of the Group’s operations.

The Committee also plays a key role in promoting and maintaining high standards of corporate responsibility, integrity, and governance practices for the benefit of shareholders and other stakeholders.

Composition

  • The Committee shall comprise not fewer than three (3) members, all of whom must be Non-Executive Directors, with a majority being Independent Directors appointed by the Board.
  • At least one (1) member shall be a member of the Malaysian Institute of Accountants (“MIA”) or fulfils the requirements under Paragraph 15.09(1)(c) of the Main Market Listing Requirements (“MMLR”).
  • A former key audit partner may only be appointed as a member after a cooling-off period of at least three (3) years.
  • No alternate director shall be appointed as a member of the Committee.
  • The term of office and performance of the Committee and each of its members shall be reviewed annually by the Board to determine whether they have discharged their duties in accordance with this Terms of Reference.
  • Any vacancy which results in non-compliance with the MMLR must be filled
    within three (3) months.

Chairman

  • The Chairman shall be elected from among the members and must be an Independent Director.
  • In the absence of the Chairman, the members present shall elect an Independent Director to chair the meeting.

Meetings

  • The Committee shall meet at least four (4) times in each financial year, with additional meetings as necessary. The quorum shall be two (2) members, the majority of whom must be Independent Directors.
  • The Company Secretaries, or such other person appointed by the Committee, shall act as the Secretaries of the Committee and be responsible for coordinating administrative matters, including notices, agenda, and minutes.
  • Representatives of Senior Management, Internal Auditors, and External Auditors may attend meetings by invitation.
  • The Committee shall meet with the External Auditors and Internal Auditors, without the presence of Management, at least once a year or whenever deemed necessary.
  • Meeting procedures:
    1. Meetings to be conducted as determined by the Committee;
    2. Notices, agenda, and papers to be circulated at least seven (7) days prior to the meeting;
    3. Decisions to be made by majority vote, with the Chairman having no casting vote where only two (2) members form a quorum;
    4. Minutes to be properly recorded and kept at the registered office; and
    5. Reports of deliberations to be presented to the Board.

Authority

The Committee is authorised by the Board to:-

  1. investigate any activity within the scope of the Committee’s duties;
  2. have the resources which are required to perform its terms of reference;
  3. have full and unrestricted access to any information as required to perform their duties;
  4. obtain any information it requires from any employee(s);
  5. obtain outside legal or independent professional advice;
  6. be able to convene meetings with external auditors or both, excluding the attendance of other directors and employees of the Group, and with other external parties, whenever deemed necessary;
  7. have the authority to form management / sub-committee(s) if deemed necessary and fit; and
  8. have the authority to delegate any of its responsibilities to any person or committee(s) that is deemed fit.

Duties & Responsibilities

A) To review the following and report the same to the Board of Directors of the Company:

  1. the audit plan with external auditors;
  2. with the external auditors, his evaluation of the system of the  internal controls;
  3. with the external auditors, their management letter and the management’s response;
  4. with the external auditors, their audit report;
  5. the assistance  given by the employees of the Company to the external auditors;
  6. the nomination or re-appointment of the external auditors and their audit fees as well as matters pertaining to resignation or change of the external auditors;
  7. the adequacy of the scope, functions and resources of the internal audit functions and that it has the necessary authority to carry out its work ;
  8. the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;
  9. to review quarterly results, and year end financial statements, prior to the approval of the Board of Directors, focusing particularly on :
  • changes in or implementation of major accounting policy changes;
  • significant and unusual events;
  • compliance with approved accounting standards and other legal requirements;
  • compliance with the Listing Requirements;
  • significant adjustments arising from the audit;
  • the going concern assumption; and
  • major judgmental areas.
  1. to review 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.
  2. to report its findings on the financial and management performance and other material matters to the Board;
  3. to consider the major findings of internal investigations and management’s response; and
  4. to consider and approve the non-audit service(s) to be provided by the external auditors subject to the confirmation from the external auditors, that such non-audit service(s) pose no threat to the Independence of the external auditors; and
  5. any other matters as directed by the Board.

B) The Committee shall establish an internal audit function which is independent of the activities it audits.

C) The Committee shall oversee all internal audit functions and is authorized to commission investigations to be conducted by internal audit as it deems fit.

D) The internal auditor shall report directly to the Committee and shall have direct access to the Chairman of the Committee.

E) All proposals by management regarding the appointment, transfer of dismissal of the internal auditor shall require the prior approval of the Committee.

F) The Committee shall prepare an Annual Report to the Board that provides a summary of the activities of the Committee and the internal audit function or activity for inclusion in the Company’s Annual Report.

G) The Committee may report any breaches of the Listing Requirements, which have not been satisfactorily resolved, to the Bursa Securities.

Meetings

A) The Committees shall meet at least four (4) times per financial year to discuss any matters raised by the Auditors in discharging their functions.  The quorum for a meeting of the Audit Committee shall be two (2) of which the majority must be independent directors.

B) The Secretaries to the Audit Committee shall be the Company Secretaries of the Company or any other person appointed by the Committee. The Secretaries shall be responsible for the co-ordination of administrative details including calling the meetings, voting and keeping of minutes.

C)A representative of the Company’s department heads and the external auditors shall normally attend the meeting as and when required.

D) The procedures of the meeting are as follows :

  1. The members may regulate their meetings as they think fit;
  2. Every notice convening meetings shall specify the place, the day, the hour and the agenda of the meeting and shall be given to all members at least (1) one day before the meeting.
  3. Any question arising at any meeting of members shall be decided by a majority of votes and a determination by a majority of members.  In the case of an equality of votes the Chairman shall not have any casting vote including but not limiting to the case where the quorum is made up of only two (2) members;
  4. The Minutes of the meetings shall be kept at the registered office of the Company;
  5. The Audit Committee shall report on each meeting to the Board.

Review of The Terms of Reference

This Terms of Reference shall be reviewed and amended by the Committee as and when deemed appropriate to ensure it remains relevant, appropriate, and consistent with regulatory requirements and corporate governance best practices. Any amendments shall be recommended to the Board for approval.