Governance

Audit Committee- Terms of Reference

Functions of the Audit Committee

  1. To consider the appointment of external auditors, the audit fee and any question of resignation or dismissal including recommending and nominating of person or persons as external auditors;
  2. To discuss with the external auditors when necessary on the nature and scope of audit and to ensure coordination of audit where more than one audit firm is involved;
  3. To review the quarterly results and year-end financial statements prior to the approval by the Board, focusing on:
    • going concern assumption
    • compliance with accounting standards and regulatory requirements
    • any changes in accounting policies and practices 
    • significant issues arising from the audit
    • major judgmental areas
  4. To prepare the Audit Committee Report at the end of each financial year;
  5. To discuss problems and reservations arising from the interim and final external auditors, and any matters the external auditors may wish to discuss (in the absence of management, where necessary);
  6. To review the external auditors’ management letter and management’s response;
  7. 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;
  8. 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; 
  9. To review the Internal Auditor’s programmes and plans for the financial year and the annual assessment of the Internal Auditor’s performance;
  10. To approve any appointment or termination of senior staff members of the internal audit functions;
  11. To take cognisance of resignation of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resignation;
  12. To review the Internal Audit reports, which highlighted the audit issues, recommendations and management response and ensure that material findings are adequately addressed by management;
  13. To carry out such other responsibilities, functions or assignments as may be defined jointly by the Audit Committee and the Board from time to time;
  14. In compliance with Paragraph 15.16 of the MMLR, where the Audit 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 Listing Requirements, the Audit Committee must promptly report such matter to the Bursa Securities.

Membership

  1. The Audit Committee shall be appointed by the Board of Directors amongst the Directors of the Company which fulfils the following requirements: 
    • the Audit Committee must composed of no fewer than three (3) members;
    • all members of the Audit Committee must be Non-Executive Directors, with a majority of them being Independent Directors; and
    • at least one member of the Audit Committee:
      • must be a member of the Malaysian Institute of Accountants; or
      • if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:-
        • he must have passed the examinations specified in Part I 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; or
      • fulfils such other requirements as prescribed or approved by the Bursa Securities.
  2. The members of the Audit Committee shall elect a Chairman from among themselves who is an independent director.
  3. No alternate Director should be appointed as a member of the Audit Committee.
  4. In the event of any vacancy in the Audit Committee resulting in the non-compliance of the Listing Requirements of the Exchange pertaining to composition of Audit Committee, the Board of Directors shall within three months of that event appoint such number of new members as may be required to fill the vacancy.
  5. The Board of Directors shall review the terms of office and performance of the Audit Committee and each of its members at least once every three years to determine whether the Audit Committee and its members have carried out their duties in accordance with their terms of reference.

Meetings

The Audit Committee shall hold at least four regular meetings per year and such additional meetings as the Chairman of the Audit Committee shall decide in order to fulfil its duties.

A quorum shall consist of a majority of independent directors.

The Company Secretary shall be the Secretary of the Audit Committee or in her absence, another person authorized by the Chairman of the Audit Committee.

The Audit Committee may, as and when deemed necessary, invite other Board members and senior management members to attend the meetings.

The external auditors may be required to attend the meetings when it is necessary.  At least once a year, the Audit Committee shall meet with the external auditors without the presence of executive board member and management.

The Chairman may engage on a continuous basis with senior management in order to be kept informed of matters affecting the Company in a timely manner.

Authority

The Audit Committee in performing its duties, is granted the authority to:

  1. investigate any issues within its terms of reference;
  2. have the necessary resources which are required to perform its duties;
  3. have unrestricted access to any information pertaining to the Company;
  4. directly communicate with the external auditors, persons carrying out the internal audit function and the employees of the Group;
  5. be able to obtain independent professional or other advice;  and 
  6. have meetings with external auditors, without the attendance of the executive members of the committee, whenever it is deemed necessary.