Corporate Governance

 

 

 

TERMS OF REFERENCE

Objective

    The primary objectives of the Audit Committee are:

  1. to assist in the fiduciary duties of the Board in matters pertaining to business ethics, policies, financial management, internal controls, accounting policies and financial reporting of the Company and its subsidiaries;
  2. to maintain and enhance a line of communication and independence between the Company and its subsidiaries and the external and internal auditors;
  3. to ensure a system of internal controls which will mitigate the likelihood of fraud or error.
  4. The appointment of a properly constituted Audit Committee is an important step to assist the Board of Directors in raising the standard of Corporate Governance and observance of good Corporate Governance practices.

 

Formation

The Audit Committee of the Company comprising all non-executive directors, a majority of whom are independent, has been established since 22 March 1994.

Composition and Memberships

  1. The Audit Committee shall be appointed by the Board from amongst themselves and shall fulfils the following requirements:-
    • the Audit Committee shall comprise of no fewer than three (3) members;
    • all the Audit Committee must be non-executive directors, with a majority of them being independent directors;
    • the Chairman of the Audit Committee shall be an independent director and shall not hold the post as Chairman of the Board; and
    • all members of the Audit Committee shall be qualified and at least one (1) member:
      • must be a member of the Malaysian Institute of Accountants (“MIA”);
      • or

      • if he is not a member of the MIA, he must have at least three (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
        • be a member of one of the bodies of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967.
      • fulfils such other requirements as prescribed and approved by Bursa Malaysia Securities Berhad and/or such other relevant authorities.
  2. No alternate director shall be appointed as a member of the Audit Committee.
  3. A “cooling-off” period of at least two (2) years shall be observed before a former audit partner in practice 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 paragraph 15.09(1) of the Bursa Securities’ Main Market Listing Requirements, the Company must fill the vacancy within three (3) months.
  5. The Board of Directors of the Company shall through the Nomination Committee review the terms of office and performances of each of the Audit Committee members through an annual assessment conducted to determine whether such audit committee members have carried out their duties in accordance with their terms of reference.

Secretary

The Company Secretary shall be the Secretary to the Audit Committee.

Meetings and Attendance

  1. The Audit Committee in discharging its duties and responsibilities shall meet at least four (4) times a year or more if required and shall record its conclusions.
  2. The Group Accountant or the Finance Director and representative of external auditors shall normally be invited to attend the meeting.
  3. The Audit Committee may ask members of management or others to attend the meetings and provide pertinent information it deems necessary.
  4. The Audit Committee may at its discretion invite any director or employee to its meeting.
  5. The Audit Committee shall meet with the external auditors without the presence executive directors of the Board at least twice a year.
  6. The Audit Committee shall be report its findings and recommendations to the Board of Directors as it deems appropriate.

Procedure of Audit Committee

The Audit Committee may regulate its own procedure with the assistance of the Secretary, in particular:-

  • the calling of meetings;
  • the notice to be given of such meetings;
  • the voting and proceedings of such meetings;
  • the keeping and circulation of minutes; and
  • the custody, production and inspection of such minutes.

Authority

The Audit Committee is given the authority to :

  • investigate any matter of the Company and its subsidiaries within its terms of reference;
  • be provided the necessary resources it requires to perform its duties ;
  • have full and unrestricted access to any information ;
  • have direct access with the external and internal auditors;
  • appoint independent/external professional advisors at the expense of the Company ; and
  • convene meetings with the external and/or internal auditors excluding the attendance of other directors and employees of the Company, whenever deemed necessary at the expense of the Company.

The Chairman of the Audit Committee may engage with the Chairman of the Board, management, finance director, internal auditors and external auditors anytime and on a continuous basis to be kept informed of matters affecting the Group.

Responsibilities and Duties

In fulfilling its primary objectives, the Audit Committee shall undertake the following responsibilities and duties:-

  1. review the independence and objectivity of the external auditors and their services including non-audit services when considering the appointment of the external auditors, the audit fee(s) and any questions on the resignation or dismissal and as to whether there are any reason (s) to believe that the Company’s external auditors are not suitable for re-appointment;
  2. discuss with the external auditors before the audit commence, the nature and scope of the audit and ensure co-ordination where more than one audit firm is involved;
  3. review:
    • with the external auditors, their audit plan;
    • with the external auditors, the overall scope of the external audit and discuss the results of their examination and their evaluation of the internal control system;
    • with the external auditors, the audit report;
    • the assistance given by the employees of the Company to the external auditors;
    • the quarterly results and year end financial statements of the Company, prior to the approval by the board of directors, focusing particularly on :
      • any changes in or implementation of major accounting policies and practices;
      • significant adjustments arising from the audit and unusual events;
      • the going concern assumption;
      • compliance with accounting standards, other statutory and legal requirements;
    • any related party transaction and conflict of interest situation that may arise within the Group including any policy, procedure , process or transaction that raises questions of management integrity;
    • the external and internal auditor’s management letter and management’s response; and
    • the internal auditor’s report and the external auditor’s management letter and their management’s response; and
    • any letter of resignation from the external auditors.
  4. To recommend the nomination of any firm of external auditors;
  5. To discuss problems and reservations arising from the interim and final audits and any other matters the auditors may wish to discuss;
  6. To do the following where an internal audit function exists:
    • to review the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work;
    • to review the internal audit program, processes, the results of the internal audit program, processes or investigation undertaken and whether or not appropriate action is taken on its recommendation(s) ;
    • to review any appraisal or assessments of the performance of members of the internal audit function;
    • to approve any appointment(s) or termination(s) of senior staff members of the internal audit function;
    • to take cognizance of resignations of internal audit staff members (for in-house internal audit function) or internal audit service provider (for outsourced internal audit function) and provide the resigning staff member or the internal audit service provider an opportunity to submit his/her reasons for resignation;
  7. To review the Group’s internal control and risk management framework to ensure its adequacy and effectiveness and to review the significant risks identified to ensure sufficient measures are taken to mitigate the risk;
  8. To review and consider reports from the Risk and Sustainability Management Committee (RSMC);
  9. To review and consider the major findings of any internal investigations and the management’s response thereto ;
  10. To consider the contract and nature for the provision of non-audit services by the external auditors (if any).
  11. To consider other matters defined by the Board or as may be prescribed by Bursa Securities or any other relevant authority from time to time.

Reporting Responsibilities

The Chairman of the Audit Committee shall report to the Board on its findings and recommendations after each meeting.

General Meetings

The Chairman of the Audit Committee shall be available to respond to any questions addressed to him at any General Meeting.

Revision of the Terms of Reference

Any amendments to the Terms of Reference shall be recommended to the Board for approval. The Terms of Reference shall be reviewed and updated regularly by the Board.

This Terms of Reference of the Audit Committee is dated 25 August 2017.