Terms of reference of the audit committee

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TERMS OF REFERENCE OF THE AUDIT COMMITTEE

Objective

The principal objectives of the Audit Committee are to assist the Board of Directors in discharging its statutory duties and responsibilities relating to the internal controls, accounting and reporting practices of the Group.

Composition

The Audit Committee shall be appointed by the Board from amongst their numbers and shall:

  • consist of no less than three (3) members;
  • consist exclusively of Non-Executive Directors with a majority being Independent Directors; and
  • have at least one (1) member who is a member of the Malaysian Institute of Accountants or who fulfils such other requirements as prescribed in the Listing Requirements.

The members of the Audit Committee shall elect a Chairman from amongst themselves who shall be an Independent Director. In the event of vacancy in the Audit Committee resulting in the non-compliance with the above, the Board shall fill the vacancy within three (3) months.

The terms of office and performance of the Audit Committee and its members shall be reviewed by the Board no less than every three (3) years. The terms of office and performance of the Audit Committee and its members have last been reviewed and renewed by the Board on 30 May 2017.

Responsibilities and Duties

The Audit Committee shall discharge the following functions:

  • to review, with the External Auditors, the audit plan, audit report and the assistance given by the Company’s officers to the Auditors;
  • to review, with the External Auditors, the adequacy of the internal control systems;
  • to assess the risks and control environment;
  • to review the quarterly reports and annual financial statements prior to submission to the Board, focusing particularly on:
    • any change in accounting policies and practices
    • significant adjustments arising from the audit; and
    • compliance with accounting standards and other legal and statutory requirements;
  • to discuss any issues and reservations arising from the interim and final audits, and any matter the Auditor may wish to discuss (in the absence of the Management where necessary);
  • to review the External Auditors’ management letter and the Management’s response;
  • to do the following, in relation to the Internal Audit function:
    • review the adequacy of the scope, functions, competency and resources of the Internal Audit function and the system of internal controls within the Group and that it has the necessary authority to carry out its work;
    • review the Internal Audit planning memorandum, processes, investigations and results of the Internal Audit processes, and where necessary ensure that appropriate actions are taken on the recommendations of the Internal Audit function;
    • review any appraisal or assessment of the performance of the Internal Audit function;
    • approve any appointment or dismissal of Internal Auditors; and
    • take cognisance of resignations of Internal Auditors and provide the Internal Auditors an opportunity to submit reasons for resigning;
  • to review the resignation, dismissal, appointment or reappointment of Internal Auditors and External Auditors of the Group and to consider the nomination of Auditors and the related fees;
  • to review any related party transactions and conflict of interest that may arise within the Company or Group;
  • to consider other topics as defined by the Board from time to time.

Authority

The Audit Committee shall:

  • have authority to investigate any matter within its terms of reference from employees of the Group;
  • have the resources which are required to perform its duties;
  • have full and unrestricted access to any information pertaining to the Group;
  • have direct communication channels with the External Auditors and the Internal Auditors;
  • have the right to obtain independent professional or other advice at the Company’s expense;
  • have the right to convene meetings with the External Auditors and/or Internal Auditors or both, excluding the attendance of the other Directors and the Management, whenever deemed necessary; and
  • promptly report to Bursa Malaysia matters which have not been satisfactorily resolved by the Board resulting in a breach of the Listing Requirements.

Meetings

The Audit Committee shall meet at least once every quarter and at such additional meetings as decided by the Chairman of the Audit Committee. The Company Secretary or any person appointed by the Audit Committee shall act as the Secretary of the Audit Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and other explanatory documentation for circulation to members of the Audit Committee prior to each meeting. The Secretary shall be responsible for keeping the minutes of the meeting of the Audit Committee, and circulating them to the Audit Committee members and other Board members. The Audit Committee shall meet with the External Auditors to consider any matter that the Auditors believe should be brought to the attention of the Directors or shareholders. The attendance of other Directors and the Management at the Audit Committee meeting shall be at the Audit Committee’s invitation, specific to the relevant meeting.

A quorum shall consist of a majority of members present who must be Independent Directors.