Chong Peng Khang Chairman
Yap Koon Roy Member
Peter Yong Kuen Fook Member
Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj Member
Dr. Suntoro Tjoe Member
The Audit Committee (“AC”), supported by the Risk Management Working Group (“RMWG”), whom assists the Board in executing its responsibilities to monitor the integrity of the Company’s financial statements and the efficiency of internal control system, ensuring the effectiveness of performance and purpose of the internal and external auditors.
2. COMPOSITION AND APPOINTMENT
- The Board, with recommendations from the Nomination Committee, shall appoint the AC members including the chairman of the AC from amongst themselves comprising no fewer than three (3) members, all of whom shall be Independent Non-Executive Directors. The majority of the AC members shall be Independent Directors. In this respect, the Board adopts the definition of “independent director” as defined under the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“the Listing Requirements”).
- Collectively, the AC should possess a wide range of necessary skills to discharge its duties. All members of the AC shall be financially literate and are able to understand the matters under the purview of the AC including the financial reporting process. At least one (1) member of the AC:-
- shall be a member of the Malaysian Institute of Accountants (“MIA”); or
- if he is not a member of MIA, he must have at least three (3) years of working experience and:
- he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or
- he must be a member of one of the associations of the accountants specified in Part II of the First Schedule of the Accountants Act 1967; or
- fulfils such other requirements as prescribed or approved by Bursa Securities.
- No alternate director of the Board shall be appointed as a member of the AC.
- No former key audit partner of the Company’s external auditors shall be appointed as a member of the AC unless the said former key audit partner has observed a cooling-off period of at least two (2) years before being appointed as a member of the AC.
- All members of the AC should undertake continuous professional development to keep themselves abreast of relevant developments in accounting and auditing standards, practices and rules.
- If a member of the AC resigns, dies, or for any reason ceases to be a member resulting in non-compliance to the composition criteria as stated in paragraph 2 above, the Board shall within three (3) months of the event appoint such number of the new members as may be required to fill the vacancy.
- The Chairman shall be responsible of the overall effectiveness and independence of the AC.
- The Chairman shall also ensure a smooth transition of each meeting.
- The Chairman shall report on the proceedings of each AC meeting to the Board at the next Board meeting following the AC meeting.
- The AC shall meet at least four (4) times in each financial year with additional meetings called as and when necessary.
- Notice of AC meetings shall be given to all the AC members unless the AC waives such requirement.
- The quorum of meeting of the AC shall consist of not less than two (2) members; the majority of members present must be Independent Directors. In the absence of the Chairman, the members present shall elect a Chairman for the meeting from among the members present.
- The AC may, as and when deemed necessary, invite other Board members, senior management personnel, representative(s) of the external auditors and external independent professional advisers to attend the meetings.
- Questions arising at any meeting of the AC shall be decided by a majority of votes of the members present, and in the case of equality of votes, the Chairman of the AC shall have a second or casting vote.
- The AC members may participate in a meeting by means of telephone or video conferencing. Such participation shall constitute presence in person at such meeting
- Minutes of each meeting shall be kept at the registered office and distributed to each member of the AC and also to the other members of the Board.
- The Company Secretary/(ies) shall act as Secretary/(ies) of the AC.
5. CIRCULAR RESOLUTION
A resolution in writing signed or approved by letter, telefax or other written electronic communications by the majority of the members who are sufficient to form a quorum, shall be valid and effectual as if it had been passed at a meeting. All such resolutions shall be forwarded or otherwise delivered to the Secretary and shall be recorded by the Secretary in the minutes book. Any such resolution may consist of several documents in like form, each signed by one (1) or more members.
The AC shall have the rights to perform its responsibilities as below:-
- The AC shall have explicit authority to investigate any matters within its Terms of Reference, the resources to do so and shall have full access to any information that is required accordingly.
- The AC shall have full and unlimited/unrestricted access to all information and documents/ resources which are required to perform its duties as well as to the internal and external auditors and senior management of the Company and Group.
- Consult independent professional or other advice and to invite outsiders with relevant experience to join the meeting, if necessary.
- Have direct communication channels with the external auditors and internal auditors and person(s) carrying out the internal function or activity (if any).
- Obtain external legal or other independent professional advice from relevant parties at the expense of the Company and to invite them to attend its meeting, if necessary.
- Where the AC is of the view that the matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements, the AC shall promptly report such matter to Bursa Securities.
The duties and responsibilities of the AC, includes the following:
- Consider the appointment and re-appointment of the external auditors, the audit fee and any question of dismissal or resignation including the review of any letter of resignation from the external auditors and whether there is a reason (supported by grounds) to believe that the external auditors are not suitable for re-appointment.
- Discuss with the external auditors before the audit commences, the audit plan, particularly the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved.
- To have a private session with both the internal auditors and external auditors at least once in every financial year.
- Review the annual evaluation of the performance of the external auditors, including the suitability, objectivity and independence of the external auditors which takes into consideration the following:
- the competence, audit quality and resources capacity of the external auditors in relation to the audit;
- the nature and extent of the non-audit services tendered and the appropriateness of the level of fees; and
- written assurance from the external auditors confirming that they are, and have been independent through the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.
- Review and approve the external auditor’s engagement letter and any amendments thereto, and recommend the external audit fee to the Board.
- Review the external auditor’s quality control procedures and the steps taken by the external auditor to respond to changes in regulatory and other requirements.
- Review the external auditor’s control themes and observations report and Management’s response thereto.
- Establish and monitor the implementation of policies or procedures for the receipt, retention, and treatment of complaints received by the Group regarding accounting, accounting controls and auditing matters and for confidential, anonymous submission by Group employees of concerns regarding questionable accounting or auditing matters or any other major issue relevant to the duties of the AC.
- Review and assess the adequacy and effectiveness of the Group’s systems for internal control, including financial reporting and financial controls.
- Review the Management’s decisions, in relation to interim, quarterly, and annual financial statements, and any formal announcements relating to the Company’s financial performance having particular regard to the following points without being limited to them.
- Critical accounting policies, practices, and methods, and any changes thereto.
- Decisions requiring a major element of judgement or significant estimates.
- The extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed.
- Appropriateness of key assumptions and methods to deliver the financial results.
- The clarity accuracy and comprehensiveness of disclosures and the Group disclosure controls and procedures.
- Significant adjustments resulting from audit.
- The going concern assumption.
- Compliance with accounting standards.
- Make recommendation to the Board based on their approval after reviewing the financial statements, regulatory financial returns and announcements.
- Where requested by the Board, provide advice to the Board as a whole on whether the Annual Report and Accounts and as appropriate, recommend its acceptance to the Board.
- To do the following, in relation to the internal audit function.
- consider and approve the appointment of the internal auditors, the audit fee and any question of resignation or dismissal;
- review the adequacy of the scope, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work;
- review the internal audit plan and results of the internal audit assessment, investigation undertaken, ensure that appropriate action is taken on the recommendations of the internal auditors;
- consider the internal audit reports and findings of the internal auditors, fraud investigations and actions and steps taken by Management in response to audit findings;
- review and decide on the budget allocated to the internal audit function;
- review appraise or assess the performance of members of the internal audit function; and
- monitor the overall performance of the Company’s internal audit function.
- To consider any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity.
- To review the adequacy and effectiveness of risk management, internal control and governance systems.
- To consider other matters as defined by the Board.
The AC shall report to the Board of Directors, either formally in writing, or verbally, as it considers appropriate on the matters within its terms of reference at least once a year, but more frequently if it so wishes.
The AC shall report to the Board of Directors on any specific matters referred to it by the Board for investigation and report.
9. REVIEW OF THE AC
The Nomination Committee shall review annually the term of office and performance of the AC and each of its members to determine whether the AC and members have carried out their duties in accordance with the Terms of Reference.
10. REVIEW OF THE TERMS OF REFERENCE
The Terms of Reference of the AC are to be regularly reviewed by the Board as and when required.