The primary objective of the Audit Committee (“AC”) is to establish a documented, formal and transparent procedure to assist the Board of Directors (“Board”) in fulfilling its fiduciary responsibilities relating to corporate accounting, financial reporting practices, system of internal control, the audit process and the process of monitoring compliance with laws and regulations.
The members of AC shall be appointed by the Board from amongst the Directors of the Company and shall comprise of at least three (3) members, all of whom shall be Non-Executive Directors, with a majority of them being independent. The Board shall at all the times ensure that at least one (1) member of the AC:
The AC must comprise of Directors who have skills, knowledge and experience relevant to the responsibilities of the AC.
The members of the AC shall elect a Chairman from among them, who shall not be the Chairman of the Board and must be an Independent Director.
A former key audit partner shall observe a cooling-off period of at least three (3) years before being appointed as a member of the AC.
No alternate director shall be appointed as a member of the AC.
In the event of any vacancy in Committee resulting in the non compliance of the above stated conditions, the Board shall upon the recommendation of the Nomination Committee, appoint such number of Directors to fill up such vacancy within three (3) months of the event.
All members of the AC, including the Chairman, will hold office only so long as they serve as Directors of the Company. The Board, via Nomination Committee review the term of office and performance of the AC, and each of its members annually to determine whether the AC have carried out their duties in accordance with their terms of reference.
The AC is empowered and authorised by the Board at the cost of the Company:
In fulfilling its primary objectives, the AC shall undertake, amongst others, the following duties and responsibilities:
Prior to the approval of the Board, review the quarterly and annual financial statements of the Group prepared by the management, where necessary, together with the external auditor and report the same to the Board, focusing particularly on:
the adequacy of the experience and resources of the external auditors;
the external auditor’s ability to meet deadlines in providing services and responding to issues in a timely manner as contemplated in the external audit plan;
To review any matters arising concerning the appointment and re-appointment, audit fee and any questions of resignation or dismissal of the external auditors;
To review the external auditor’s audit report, management letter and management’s response;
The scope of the non-audit services:
To discuss problems and reservation, if any, arising from the interim and final audits, and any matter which the external auditors wish to discuss in the absence of the Management, where necessary; and
To review with the external auditors for the Statement on Risk Management and Internal Control of the Group for inclusion in the Annual Report.
To review any related party transactions and conflict of interest situations that may arise within the Group including any transaction, procedure or course of conduct that raises questions of management integrity.
To prepare the annual AC report to the Board which includes the composition of the AC, its terms of reference, number of meetings held, a summary of its activities and the existence of internal audit services and summary of the activities for inclusion in the Annual Report and to review the Board’s statements on compliance with the Malaysian Code of Corporate Governance for inclusion in the Annual Report.
The AC shall meet at least four (4) times in a financial year and additional meetings may be called at any time at the AC Chairman’s discretion. The Executive Directors, senior management, representatives of the internal and external auditors may be invited to attend the AC meeting. The Internal Auditors have the right to appear and be heard at any meeting of the AC and are recommended to attend each AC meeting. Upon the request of the External and / or Internal Auditors, the Chairman shall also convene a meeting of the AC to consider any matter the External and / or Internal Auditors believe should be brought to the attention of the Board or the shareholders. The AC shall meet at least twice a year with the External Auditors without the presence of executive Board members and the Management.
In the event the elected Chairman is not able to attend a meeting, a member of the AC shall be nominated as Chairman for the meeting. The nominated Chairman shall be an Independent Non-Executive Director.
Subject to the notice and quorum requirements as provided in the Terms of Reference, AC meeting may be held and conducted through the telephone or any communication equipment which allows all persons participating in the meeting to hear each other. A person so participating shall be deemed to be present in person at the meeting and shall be entitled to vote and be counted in a quorum accordingly.
The quorum for an AC meeting shall consist of not less than two (2) members, who are both Independent Director.
Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the committee, any other person required to attend and all other non-executive directors, no later than seven (7) days before the date of the meeting. Supporting papers shall be sent to committee members and to other attendees as appropriate, at the same time.
The Company Secretary or such other person authorised by the Board shall act as the Secretary of the AC. The Company Secretary shall record, prepare and circulate the minutes of the meetings of the AC and ensure that the minutes are properly kept and produced for inspection if required. The AC shall report to the Board and the minutes of each meeting shall be tabled to the Board for notation. The expressions “in writing” and “signed” include approval by letter, telegram, telex, telefax or electronic means by any such member of the Committee.
A resolution in writing, signed by a majority of the AC members present in Malaysia for the time being entitled to receive notice of a meeting of the AC, shall be as valid and effectual as if it had been passed at a meeting of the AC duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more of the members of the AC.
A Director may participate in a Committee meeting by means of a conference telephone or any communication equipment or device which allow all persons participating at the meeting to hear and speak with each other and shall be deemed as present at such meeting.
This Terms of Reference will be reviewed and updated at least once a year to ensure it remains consistent with the AC objectives and responsibilities.
Any revision or amendment to this Terms of Reference, as proposed by the AC or any third party, shall be presented to the Board for approval. Upon the Board’s approval, the said revision or amendment shall form part of this Terms of Reference and this Terms of Reference shall be considered duly revised or amended.