Terms of Reference for Audit Committee
i) The Audit Committee (“the Committee”) was established by the Board of Directors (“the Board”) of the Company at its meeting held on 3 March 1994; and
ii) The Board shall ensure that the composition and functions of the Committee comply as far as possible with the Bursa Malaysia Securities Berhad Listing Requirements as well as other regulatory requirements.
1. The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than three members who must be Non-Executive Directors and majority of whom shall be Independent Directors.
2. At least one member of the Committee –
(i) must be a member of the Malaysian Institute of Accountants; or
(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and –
(aa) he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or
(bb) he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or
(iii) fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.
3. No Alternate Director shall be appointed as a member of the Committee.
4. The members of the Committee shall select a Chairman from among their numbers who shall be an Independent Director.
5. If a member of the Committee resigns, dies or for any other reason ceases to be a member resulting in non-compliance of paragraphs 1, 2 and 4 above, the Board shall, within 3 months of that event, appoint such number of new members as may be required to fill the vacancy.
6. The term of office and performance of the Committee and each of its members shall be reviewed by the Nominating Committee annually to determine whether such Committee and members have carried out their duties in accordance with their terms of reference.
7. The Committee is authorized by the Board to investigate any activity within its terms of reference. It is authorized to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
8. The Committee is authorized by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.
9. To assist the Board in fulfilling its fiduciary responsibilities relating to corporate accounting and reporting practices of the Company and the Group;
10. To maintain, through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as the internal auditors;
11. To act upon the Board of Directors’ request to investigate and report on any issue or concern with regard to the management of the Group.
Duties and Responsibilities
12. To review with the external auditors the audit plan which comprises audit and non-audit services, nature and scope of non-audit services, audit report, findings and recommendations and their evaluation of the system of internal controls;
13. To review the assistance given by the company to the auditors.
14. To consider and recommend for approval of the Board the appointment or re-appointment of the external auditors, the audit fees and any questions of their resignation or dismissal;
15. To review the adequacy of the scope, functions, competency and resources of the internal audit function, the internal audit plans, scope of examination of the internal auditors and ensure that appropriate action is taken by Management in respect of the audit observations and the Committee’s recommendations;
16. To review the quarterly and year end financial statements before submission to the Board. The review should focus primarily on changes in or implementation of major accounting policy changes, significant and unusual events, and compliance with accounting standards as well as other regulatory requirements and the adequacy of information disclosure for a fair and full presentation of the financial affairs of the Company and the Group;
17. To review any related party transaction and conflict of interest situation that may arise within the Company and the Group including any transaction, procedure or conduct that raises questions of management integrity;
18. To direct any special investigations on the Group’s operations to be carried out by the internal audit department or any other appropriate agencies;
19. To discuss problems and reservations arising out of external or internal audits and any matters which the auditors wish to bring up in the absence of Management or the Executive Directors of the Group where necessary; and
20. To perform other related duties as may be agreed by the Committee and the Board.
Attendance at meetings
21. At the invitation of the Committee, the Internal Audit Manager, the Head of Finance & Control, and representative(s) of the external auditors shall normally attend meetings. Other Board members shall also have the right of attendance. However, at least twice a year the Committee shall meet with the external auditors without executive Board members present.
22. The Internal Audit Manager shall be the Secretary of the Committee.
Frequency of meetings
23. Meetings shall be held four (4) times a year or at such other time(s) as it deems necessary to fulfil the Committee’s responsibilities. The external auditors may request a meeting if they consider that one is necessary.
24. The Quorum for the Committee shall consist of a majority of independent directors.
25. The Secretary shall circulate the minutes of meetings of the committee to all its members.