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| Terms of Reference of the Audit
Committee |
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1. MEMBERSHIP
1.1 The Audit Committee shall be appointed by the Board from amongst their number and shall be
composed of not fewer than three (3) members.
| 1.2 |
All members of the Audit Committee should be Non-Executive Directors, with a majority of
the members being Independent Directors.
In determining independence, the Board will observe the requirements of the Listing
Requirements of Bursa Securities.
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1.3 All members of the Audit Committee should be financially literate and at least one member of
the Audit Committee:
 (a) |
must be a member of the Malaysian Institute of Accountants; or
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| (b) |
if he is not a member of the Malaysian Institute of Accountants, he must have at least 3
years’ working experience and:
(i)
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he must have passed the examinations specified in Part I of the 1st Schedule of the
Accountants Act 1967; or |
| (ii) |
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 |
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| (c) |
must have a degree in accounting or finance and at least 3 years’ post qualifying
experience in accounting or finance; or
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| (d) |
must have at least 7 years’ experience as a chief financial officer of a corporation or be
primarily responsible for the management of the financial affairs of a corporation.
In determining the required qualification, the Board will accept any other relevant
requirements of the Listing Requirements of Bursa Securities.
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1.4 The Board must ensure that no alternate Director is appointed as a member of the Audit
Committee.
1.5 The members of the Audit Committee shall elect a Chairman from amongst their number who
shall be an Independent Director.
| 1.6 |
If a member of the Audit Committee resigns, dies or for any reason ceases to be a member
resulting in non-compliance with subparagraphs 1.1, 1.2 and 1.3 above, with the result that the
number of members is reduced to below three (3), the Board 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. |
1.7 The appointment of an Audit Committee member terminates when the member ceases to be a
Director.
| 1.8 |
The term of office and performance of each of Audit Committee member must be reviewed at
least once every 3 years to determine whether these members have carried out their duties in
accordance with the Audit Committee’s terms of reference. |
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2. AUTHORITY AND RIGHTS
| 2.1 |
The Audit Committee wherever necessary and reasonable for the performance of its duties,
shall in accordance with the procedure determined by the Board and at the cost of the
Company: |
| (a) |
have authority to investigate any matter within its Terms of Reference;
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| (b) |
have the resources which are required to perform its duties;
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| (c) |
have full and unrestricted access to any information pertaining to the Group;
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| (d) |
have direct communication channels with the External Auditors and members of the
Group Corporate Assurance function which person(s) carries out the internal audit
function for the Group;
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| (e) |
be able to obtain independent professional or other advice and to secure the attendance of
outsiders with relevant experience and expertise if it considers this necessary; and
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| (f) |
be able to convene meetings with the External Auditors, members of Group Corporate
Assurance or both, excluding the attendance of the executive members of the Group,
whenever deemed necessary. |
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3. FUNCTIONS AND DUTIES
The Audit Committee shall, amongst others, discharge the following functions:
3.1 Financial Reporting
| (a) |
Review the quarterly results and annual financial statements prior to the approval by the
Board, focusing particularly on:
| (i) |
changes in or implementation of major accounting policy changes; inclusive of the
propriety of accounting policies, principles and practices adopted by the management
and accepted by the External Auditors, where alternatives are also acceptable;
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| (ii) |
significant and unusual events and significant adjustments arising from the external
audit;
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| (iii) |
the accuracy and adequacy of the disclosure of information essential to a fair and full
presentation of the financial affairs of the Group;
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| (iv) |
compliance with accounting standards, other statutory and legal requirements and the
going concern assumption.
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| (b) |
Discuss problems and reservations arising from the interim and final audits and any
matter the External Auditors may wish to discuss (in the absence of the Management,
where necessary). |
3.2 Internal Control and Risk Management
| (a) |
Assume responsibility for the regular review and/or appraisal of the effectiveness of the
Group's system of internal control, risk management systems and governance process. |
3.3 Related Party Transactions
| (a) |
Review any related party and inter company transactions and conflict of interest situations
that may arise within the Company/Group and any related parties outside the Group
including any transaction, procedure or course of conduct that raises questions of
management integrity. |
3.4 External Audit
| (a) |
Discuss with the External Auditors before the audit commences, the nature, scope and timing of the audit plan and ascertain that it will meet the needs of the Board, the shareholders and regulatory authorities; the audit plan, audit report and their evaluation of the Group's internal controls, reporting of significant deficiencies and/or material weaknesses, reservations, difficulties encountered and the assistance given by employees of the Group.
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| (b) |
Recommend the audit fee to the Board and pre-approve fees in respect of non-audit
services that may be performed by the External Auditors, ensuring that the provision of
such services does not impair the independence and objectivity of the external audit firm.
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| (c) |
Review and monitor the independence and objectivity of the External Auditors and the
effectiveness of the audit process annually, taking into consideration relevant UK
professional and regulatory requirements.
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| (d) |
Oversee the process of the appointment and removal of the External Auditors, review any
letter of resignation of the External Auditors, and make appropriate recommendations
through the Board to the Shareholders to consider at the Annual General Meeting.
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| (e) |
Review the External Auditors’ management letter and Management’s response. |
3.5 Internal Audit
| (a) |
Group Corporate Assurance function reports to the Audit Committee.
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| (b) |
Monitor and review the effectiveness of the Group Corporate Assurance function, its
scope, functions, independence, level of its competency, adequacy of resources; and that
it has the necessary authority to carry out its work.
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| (c) |
Review the internal audit programme, processes and the results of the internal audit
programme, processes or investigation undertaken and whether or not appropriate action
is taken on the recommendations made.
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| (d) |
Approve the appointment or termination of managerial staff members of the Group
Corporate Assurance audit function and take cognisance of resignations of Group
Corporate Assurance staff members and provide the resigning staff member an
opportunity to submit his reasons for resigning.
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| (e) |
Consider the major findings of internal investigations and Management’s response and
other topics as defined by the Board.
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| (f) |
Ensure the Group Corporate Assurance function is independent of the activities they audit
and are performed with impartiality, proficiency and due professional care. |
3.6 Reporting Functions and Duties
| (a) |
Submit to the Board on a periodic basis a Report on the summary of activities of the Audit Committee in the discharge of its functions and duties in respect of each financial quarter and the financial year.
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| (b) |
Promptly report to the Bursa Securities on any matter reported by it to the Board of the Company which has not been satisfactorily resolved resulting in a breach of the Bursa Securities Listing Requirements.
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| (c) |
Prepare, with the assistance of Management and Group Corporate Assurance, a formal report for inclusion in the Annual Report. |
3.7 Other Functions and Duties
| (a) |
Review the arrangements by which staff of the Group may in confidence, raise concerns about possible improprieties in matters of financial reporting, financial control or other business or commercial related matters.
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| (b) |
Review the allocation of options in accordance with established allocation criteria as set
out in any prevailing bye-laws governing employee or other share option schemes.
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| (c) |
Carry out any other function that may be mutually agreed upon by the Committee and the
Board which would be beneficial to the Company and ensure the effective discharge of
the Committee’s duties and responsibilities.
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| (d) |
Review and reassess, with the assistance of Management, the external auditors and
external legal counsel (if necessary), the adequacy of the Committee’s Terms of
Reference at least annually. |
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4. MEETINGS AND MINUTES
| 4.1 |
To form a quorum in respect of a meeting of the Audit Committee, the majority of members
present must be Independent Directors.
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| 4.2 |
A minimum of four meetings per year are to be planned, although additional meetings may be
called at any time at the Audit Committee Chairman’s discretion. An agenda shall be sent to
all members of the Audit Committee and any other persons who may be required/invited to
attend. All meetings to review the quarterly results and annual financial statements, shall be
held prior to such quarterly results and annual financial statements being presented to the
Board for approval.
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| 4.3 |
Notwithstanding paragraph 4.2 above, upon the request of any member of the Audit
Committee, the External Auditors or Group Corporate Assurance, the Audit Committee
Chairman shall convene a meeting of the Audit Committee to consider the matters brought to
its attention.
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| 4.4 |
In addition to the Audit Committee members, the meeting will normally be attended by
representatives of the External Auditors and by the Head of Group Corporate Assurance. Any
Board members, or any member of Senior Management or any other relevant employee within
the Group may be invited to attend upon the invitation of the Audit Committee.
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| 4.5 |
At least twice a year, the Audit Committee shall meet with the External Auditors without the
Executive Director and Senior Management being present.
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| 4.6 |
The Chairman of the Audit Committee should engage on a continuous basis with Senior Management, the Head of Group Corporate Assurance and the External Auditors in order to be kept informed of matters affecting the Group.
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| 4.7 |
Detailed minutes of the Audit Committee’s meetings will be made available to all Board
members. A summary of significant matters and resolutions will be reported to the Board by
the Audit Committee.
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| 4.8 |
The books containing the minutes of proceedings of any meeting of the Audit Committee shall
be kept by the Company at the principal office of the Company, and shall be open to the
inspection of any member of the Audit Committee and the Board.
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| 4.9 |
The Audit Committee may establish any regulations or procedures from time to time to govern
its meetings, keeping of minutes and its administration.
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| 4.10 |
The Group Company Secretary shall act as the Secretary to the Audit Committee. |
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