Terms of Reference - AC


AUDIT COMMITTEE - TERMS OF REFERENCE


A. OBJECTIVE


The objective of the Audit Committee is to assist Board of Directors (“the Board”) in fulfilling is fiduciary responsibilities relating to internal controls, financial and accounting records and policies as well as integrity in financial reporting practices of the Company and its subsidiaries (“the Group”).


B. MEMBERSHIPS

The members of the Audit Committee shall be appointed by the Board from amongst its members. It shall consist of not less than three (3) members of whom a majority shall be independent directors and at least one of whom must be:-

(a) a member of the Malaysian Institute of Accountant (“MIA”); or

(b) if he is not a member of MIA, he must have at least three (3) years of working experience and:

  1. he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or
  2. he must be a member of one of the associations of the accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

(c) fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad ("Bursa Securities").


No alternate director shall be appointed as a member of the Audit Committee.

If a member of the Audit Committee resigns, dies or for any reason ceases to be a member with the result that the number of members is reduced to below three (3), the Board shall within three (3) months appoint such number of new members as may be required to make up the shortfall.


In case a former key audit partner is being nominated as a member of the Audit Committee, he shall observe a cooling-off period of at least two (2) years before being appointed as a member of the Audit Committee.


C. CHAIRMAN

(i) The Chairman, who shall be elected by the Audit Committee, shall be an independent director and is not the Chairman of the Board.
(ii) In the absence of the Chairman, the meeting shall be chaired by an Independent Director.
(iii) The Chairman should engage on a continuous basis with senior management, such as the chief executive officer, the chief operating officer, the group financial controller, the Internal Auditors and the External Auditors in order to be kept informed of matters affecting the company.


D. SECRETARY

The Company Secretary and/or his/her nominee and/or any other persons as may be appointed by the Audit Committee shall be the Secretary of the Audit Committee.


E. QUORUM OF MEETINGS

The quorum for the meeting of the Audit Committee shall be two (2) where the majority of members present must be Independent Non-Executive Director.


F. MEETINGS

The Audit Committee shall meet at least four (4) times in each financial year although additional meetings may be called at any time, at the discretion of the Chairman of the Audit Committee.

The Audit Committee shall cause minutes to be made in respect of the proceedings and resolutions of all its meetings. The minutes of the meetings of the Audit Committee shall be tabled at Board Meetings to inform the Board of the activities of the Audit Committee.

Other Board members and employees shall attend Audit Committee meetings only at the invitation of the Audit Committee.

Audit Committee Meetings may be conducted by means of telephone conference, video conference or any other form of audio or audio-visual instantaneous communication and the participation in the meeting pursuant to this provision shall constitute presence in person at such meeting.

All decisions at such meeting shall be decided on a show of hands on a majority of votes.

The internal auditors and external auditors may attend at any meeting at the invitation of the Audit Committee and shall appear before the Committee when required to do so by the Committee. The internal auditors and external auditors may also request a meeting if they consider it is necessary.

At least twice a year, the Audit Committee shall meet with the external auditors without the presence of any executive directors and management.

The Audit Committee shall meet prior to the release of the Group’s quarterly results and annual reports to discuss the proposed disclosures in the quarterly announcements and annual reports.


G. DUTIES AND RESPONSIBILITIES

1. To assist the Board in discharging its statutory duties and responsibilities relating to accounting policies and procedure as well as reporting practices of the Company and the Group in accordance with Generally Accepted Accounting Practices.

2. To review, assess, evaluate, approve and/or report to the Board on the following:

(a) with External Auditors

  1. the annual audit plan, auditors’ report and management letter and management’s response to the management letter.
  2. their evaluation of the system of internal controls.
  3. issues and/or findings arising from audits and management’s response;.
  4. the recommendation of nomination and re-appointment of the external auditors and audit fee, after reviewing the suitability, resources, competency and independence of the external auditors
  5. make appropriate recommendations to the Board on matters of resignation, dismissal or cessation of office of the external auditors and secure the reason of such resignation, dismissal or cessation of office.
  6. the suitability and independence of the external auditors, including reveiwing the external auditors’ non-audit services.


(b) the Internal Audit Functions

  1. the adequacy of the scope, competency and resource of internal audit functions and that it has the necessary authority to carry out its work.
  2. the internal audit plan, process, the results of internal audit assessment or investigation undertaken and whether or not appropriate action is taken on the recommendations.
  3. Review any special audit which the Audit Committee deems necessary.
  4. annually assess the performance of services provided by the internal auditors.


(c) Financial Reporting

The quarterly results and year-end financial statements prior to the approval by the Board, focusing particularly on:-

  1. any changes in or implementation of accounting policies and practices;
  2. significant matters highlighted including financial reporting issues, significant judgements made by Management, significant and unusual events or transaction, and how these matters are addressed.
  3. going concern assumption.
  4. compliance with accounting standards, regulatory and other legal requirements.


(d) Risk Management and Internal Control

  1. recommend such measures as to be taken by the Board on the effectiveness of the system of internal control and risk management practices of the Group.
  2. evaluate the quality and effectiveness of Company's internal control system and management information systems, including in compliance with applicable laws, rules, corporate governance requirements and guidelines.
  3. recommend to the Board the Directors’ Statement on Risk Management and Internal Control and any changes to the said Statement.


(e) Related Party Transactions

Any related party transaction and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that arises questions of management integrity.


3. To report on any matter reported by it to the Board which has not been satisfactorily resolved resulting in a breach of the Listing Requirements to Bursa Securities;

4. To prepare the Audit Committee Report for inclusion in the Company’s Annual Report;

5. To review the following for publication in the Company’s Annual Report:

  1. Statement on Risk Management and Internal Control; and
  2. Circular to Shareholders on Recurrent Related Party Transactions.


6. To undertake any other such functions as may be agreed to by the Audit Committee and the Board.


H. RIGHTS AND AUTHORITY

In conducting its duties and responsibilities, the Audit Committee shall have:-

  1. The authority to investigate any matter within its terms of reference.
  2. Adequate resources required to perform its duties.
  3. The authority to seek full and unrestricted access to information, records and documents relevant to the Group and seek any information it requires from any employee and all employees are directed to co-operate with the Committee on its request.
  4. Direct communication channels with the External and Internal Auditors.
  5. The authority to engage, consult and obtain independent professional advice whenever it deems fits and able to secure the attendance of outsiders with relevant experience and expertise for consultation if it considers necessary.
  6. The ability by itself of by manner to convene meetings and dialogue with the external and internal auditors, excluding the attendance of Management, whenever deemed necessary.


I. ASSESSMENT OF AUDIT COMMITTEE’S PERFORMANCE

The terms of office and performance of an Audit Committee and each of its members must be reviewed by the Nomination and Remuneration Committee annually to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.


J. ASSESSMENT OF AUDIT COMMITTEE’S PERFORMANCE

The Audit Committee shall recommend any changes to its term of reference in such manner as the Audit Committee deems appropriate to the Board for approval. The terms of reference shall be accessed, reviewed and updated where necessary i.e. when there are changes to the Malaysian Code on Corporate Governance, Listing Requirement or any other regulatory requirements. It should also be reviewed and updated when there are changes to the direction or strategies of the Group that may affect the Audit Committee's role.