Terms of Reference - Audit Committee

Terms of Reference

1. COMPOSITION

1.1 The Audit Committee shall be appointed by the Board of Directors from amongst the Directors of the Company. The Audit Committee shall comprise of not less than three (3) members, of whom :- :-

a) All the Audit Committee members must be Non-Executive Directors, with a majority of them being Independent Directors; and

b) At least one member of the Audit Committee:-

(i) must be a member of the Malaysian Institute of Accountants (“MIA”); or

(ii) 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
  • 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.

(iii) fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).

c) No alternate Director shall be appointed as a member of the Audit Committee.

1.2 The members of the Audit Committee shall elect a Chairman from among their members who shall be an independent director.

1.3 In the event of any vacancy in the Audit Committee resulting in the non-compliance of subparagraphs 15.09(1) and 15.10 of the Listing Requirements of Bursa Securities, the Board of Directors shall, within three (3) months of that event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

2. QUORUM

a) The quorum of the Audit Committee shall be two (2) of whom the majority of members present shall be Independent Directors.

3. ATTENDANCE AND MEETINGS

a) The Audit Committee may invite any member of the management, employees, other Directors and representatives of the internal and external auditors to be present at meetings of the Audit Committee.

b) The Audit Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall decide in order to fulfil its duties. In addition, the Chairman may call a meeting of the Audit Committee if a request is made by any Audit Committee member, the Company’s Managing Director, or the internal or external auditors.

c) In any event, should the external auditors request, the Chairman of the Audit Committee shall convene a meeting of the Audit Committee to consider any matter the external auditor believes should be brought to the attention of the Directors or Shareholders.

4. FUNCTIONS

The Audit Committee shall, amongst others, discharge the following functions :-

4.1 Review the following and report the same to the Board of Directors :

i. with the external auditor, the audit plan;

ii. with the external auditor, his evaluation of the system of internal controls;

iii. with the external auditor, his audit report,

iv. the assistance given by the employees of the Company to the external auditor;

v. the adequacy of the scope, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work;

vi. the internal audit plan, processes, the results of the internal audit assessments, investigation undertaken and whether or not appropriate actions are taken on the recommendations proposed/given;

vii. the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusing particularly on :-

a)   changes in or implementation of major accounting policy changes;

b)   significant matters highlighted including financial reporting issues, significant judgements made by management, significant and unusual events or transactions, and how these matters are addressed; and

c)   compliance with accounting standards and other legal requirements;

viii. any related party transaction and conflict of interest situation that arose, persist or may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity, and the measures taken to resolve, eliminate, or mitigate such conflicts;

ix. any letter of resignation from the external auditors of the Company;

x. whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for re-appointment;

xi. review of the Statements on Risk Management and Internal Control; and

4.2 Recommend the nomination of a person or persons as external auditors.

4.3 The Audit Committee should have policies and procedures to review and monitor the suitability, objectivity and independence of external auditors to safeguard the quality and reliability of audited financial statements; to establish policies governing the circumstances under which contracts for the provision of non-audit services can be entered into and procedures that must be followed by the external auditors; to obtain written assurance from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

4.4 To verify the allocations of options pursuant to a share issuance scheme for employees, if any, as being in compliance with the criteria for allocation of options under the share issuance scheme, at the end of each financial year.

5. PROCEDURE

The Audit Committee may regulate its own procedures, in particular :-

i. the calling of meetings;

ii. the notice to be given of such meetings;

iii. the voting and proceedings of such meetings;

iv. the keeping of minutes; and

v. the custody, production and inspection of such minutes.

6. AUDIT COMMITTEE REPORT

i. The Audit Committee shall ensure that an Audit Committee Report be prepared at the end of each financial year that complies with subparagraphs (ii) and (iii) below.

ii. The Audit Committee Report must be clearly set out in the annual report of the Company.

iii. The Audit Committee Report shall include the following:-

a) the composition of the Audit Committee, including the name, designation (indicating the chairman) and directorship of the members (indicating whether the directors are independent or otherwise);

b) the number of Audit Committee meetings held during the financial year and details of attendance of each Audit Committee member;

c) a summary of the work of the Audit Committee in the discharge of its functions and duties for that financial year of the Company and how it has met its responsibilities;

d) a summary of the work of the internal audit function or activity; and

e) a summary of any conflict of interest or potential conflict of interest situation reviewed by the Audit Committee pursuant to paragraph 15.12(1)(h) (excluding a related party transaction) of the Main Market Listing Requirements, and the measures taken to resolve, eliminate, or mitigate such conflicts.

7. RIGHTS OF THE AUDIT COMMITTEE

The Audit Committee shall, wherever necessary and reasonable for the performance of its duties in accordance with a procedure to be determined by the Board of Directors and at the cost of the Company :-

i. have authority to investigate any matter within its terms of reference;

ii. have the resources which are required to perform its duties;

iii. have full and unrestricted access to any information pertaining to the Company or Group;

iv. have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;

v. be able to obtain independent professional or other advice; and

vi. be able to convene meetings with the external auditors, the person(s) carrying out the internal audit function or activity or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

8. REPORTING OF BREACHES TO BURSA SECURITIES

Where the Audit Committee is of the view that a matter reported by it to the Board of Directors of the Company has not been satisfactorily resolved resulting in a breach of the Bursa Securities’ Listing Requirements, the Audit Committee must promptly report such matter to Bursa Securities.

9. REVIEW OF THE AUDIT COMMITTEE

The Nominating Committee of the Company must review the term of office and performance of the Audit Committee and each of its members annually to determine whether the Audit Committee and members have carried out their duties in accordance with their terms of reference.

10. SECRETARY

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

(Last reviewed and approved: 28 August 2023)