AUDIT COMMITTEE – TERMS OF REFERENCE

 

Composition

The committee currently comprises three (3) Independent Non-Executive Directors. The Committee meets not less than four (4) times a year and is governed by clearly defined terms of reference.

 

Terms of Reference

Objective

The primary objective of the Audit Committee is to assist the Board in fulfilling its fiduciary responsibilities relating to corporate accounting, system of internal controls, management and financial reporting practices of the Group.

Composition of the Audit Committee

  1. All members of the Audit Committee must be non-executive directors with a majority of them being Independent Directors.
     
  2. All members of the Audit Committee shall be financially literate and at least one member of the Audit 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 3 years’ working experience and

(a) he must passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or

(b) he must be a member of one of the association of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

(iii)  fulfills such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad.

  1. Any former key audit partner of the Group shall observe a cooling-off period of at least two (2) years before being appointed as a member of the Audit Committee. A key audit partner means an audit partner who makes key decisions and/or judgments on significant matters with respect to the audit of the financial statements of the Company and/or its subsidiaries for a particular financial year.
     
  2. The Committee shall be appointed by the Board from amongst its number and shall consist of not less than three (3) members. The quorum for meeting of the Committee shall be two (2), the majority of members present must be Independent Directors.
     
  3. The Chairman of the Committee shall be appointed by the members of the Audit Committee who is an Independent Director.

Main Duties and Responsibilities

  1. To perform a yearly assessment of the suitability, objectivity and independence of the external auditors before making recommendation to the Board for the appointment or re- appointment of the external auditors.

The Audit Committee takes the following into consideration:-
the adequacy of the experience and resources of the external auditors; the nature of the non-audit services and the fees payable for such services; and the level of independence of the external auditors

The external auditors are required to confirm to the Committee that they have complied with the relevant ethical requirements regarding independence throughout the conduct of the audit engagement for each financial year.

  1. To consider the audit fee and any questions of resignation or dismissal of the external auditors.
     
  2. To discuss with the external auditors before the annual audit commences, the nature and scope of the audit plan.
     
  3. To review the quarterly and annual financial statements of the Company and Group focusing particularly on:-

(a) any changes in accounting policies and practices;
(b) significant adjustments arising from the audit;
(c) the going concern assumption;
(d) compliance with accounting standards and other legal requirements.

  1. To discuss problems and reservations arising from the final and any interim audits; evaluation of the system of internal controls and any matter the external auditors may wish to discuss, including assistance given by the employees of the Group to the auditors; and to review the auditors’ audit report, management letter and management’s response.
     
  2. To review the internal audit plan, processes, the results of the internal audit assessments, investigations undertaken and whether or not appropriate action is taken on the recommendations.
     
  3. To consider any related party transactions and conflict of interest that may arise within the Group.
     
  4. To review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work.
     
  5. To review any letter of resignation from the external auditors of the Company.
    10. Such other functions as may be agreed by the Audit Committee and the Board of Directors.

 

Authority

The Committee is authorised by the Board within its term of reference and at the cost of the Group to investigate any matter and shall have the resources which are required to perform its duties.

The Committee also has full and unrestricted access to any information pertaining to the Group and has direct communication channels with the external auditors and person carrying out the internal audit function or activity.

The Committee is able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company whenever deemed necessary.

The Committee is authorised to obtain independent professional or other advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

It is the Committee’s discretion to meet with the external auditors at least twice a year without the presence of the executive directors. If the Committee members are satisfied with the reporting practices as well as the level of independence shown by the external auditors or they are able to clarify matters directly with the external auditors and do not feel the need to convene an additional meeting, this meeting shall not be held.

 

Meetings and Minutes

Meetings shall be held not less than four times a year. Additionally the Chairman shall convene a meeting of the Committee if requested to do so by its member, the management or the internal or external auditors to consider any matters within the scope and responsibilities of the Committee.

An Agenda shall be sent to all members of the Committee and any persons that may be required to attend. Minutes of each meeting shall be kept and distributed to each member of the Committee and also the members of the Board of Directors. The Secretary to the Audit Committee shall be the Company Secretary.

A resolution in writing signed by a majority of the Committee members for the time being entitled to receive notice of meeting of the Committee, shall be as valid and effectual as if it had been passed at a meeting of the Committee duly called and constituted. Any such resolution may consist of several documents in like form each signed by one (1) or more Committee members. Any such document may be accepted as sufficiently signed by a Committee member if transmitted to the Company by telex, telegram, cable, facsimile or other electrical or digital written message to include a signature of a Committee member.

The term of reference is reviewed and approved by the Board of Directors on 27 June 2019.