Terms of Reference – Audit Committee

The Board shall appoint the members of the Audit Committee from amongst themselves, which fulfils the following requirements:

1. The Audit Committee shall be composed of at least three (3) members;
2. All the Audit Committee members should be non-executive directors with a majority of the Audit Committee must be independent directors;
3. The Chairman of the Audit Committee shall be an independent director and he is not the Chairman of the Board;
4. All members of the Audit Committee should be financially literate and at least one of the members of the Committee must:-
   1. be a member of the Malaysian Institute of Accountants; or
   2. have at least three (3) years working experience and;
      • Must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967, or
      • Must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967.
   3. fulfil such other requirements as prescribed by the Bursa Malaysia Securities Berhad; and
5. The executive director or any alternate director shall not be a member of the Audit Committee.
6. An individual who is a former key audit partner of the Company should not be appointed as a member of the AC unless he observes a cooling-off period of at least three (3) years from the date of his resignation as the key audit partner of the Company before being appointed as a member of the AC.

The Audit Committee shall be in accordance with the procedure determined by the Board and at the cost of the Group:-

1. have explicit authority to investigate any matter within its terms of reference;
2. have the resources which are required to perform its duties;
3. have full and unrestricted access to any information pertaining to the Group;
4. have unrestricted access to the Group Chief Executive Officer
5. have direct communication channels with the external auditors and person(s) carrying out the internal audit function;
6. be able to obtain independent/external professional or other advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary; and
7. be able to convene meetings with the external auditors, the internal auditors or both excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

The functions of the Audit Committee are as follows:

1. To do the following, in relation to the internal audit function:-
   1. review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work;
   2. review the internal audit programme and results of the internal audit process or investigation undertaken and whether or not appropriate actions are taken on the recommendations of the internal audit function;
   3. review any appraisal or assessment of the performance of members of the internal audit function;
   4. approve any appointment or termination of senior staff members of the internal audit function; and
   5. take cognisance of resignation of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.
2. To do the following, in relation to the external audit function:-
   1. consider the appointment of the external auditors, the audit fee and any questions of resignation or dismissal and on whether there is reason (supported by grounds) to believe that the Company’s external auditors is not suitable for re-appointment;
   2. discuss with the external auditors before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;
   3. review the quarterly results and year end financial statements, prior to the approval by the Board, focusing particularly on:-
      1. any changes in or implementation of major accounting policy and practices;
      2. significant adjustments arising from the audit;
      3. significant matters highlighted including financial reporting issues, significant judgements made by management, significant and unusual events or transactions, and how these matters are addressed;
      4. the going concern assumption; and
      5. compliance with accounting standards and other legal requirements.
   4. review any management letter sent by the external auditors to the Company and the management’s response to such letter;
   5. discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss (in the absence of management where necessary);
   6. review the adequacy of existing external auditors audit arrangements, with particular emphasis on the scope and quality of the audit;
   7. review the external auditors’ audit report;
   8. review the assistance given by the employees of the Group to the external auditors;
   9. review all areas of significant financial risk and the arrangements in place to contain those risks to acceptable levels.
3. To consider any related party transactions and potential conflict of interest situations that may arise within the Company and the Group including any transaction, procedure or course of conduct that raises questions of management integrity.
4. To consider the major findings of internal investigations and management response.
5. To meet with the external auditors without executive board members present at least twice a year.
6. To carry out any other function that may be mutually agreed upon by the Committee and the Board, which would be beneficial to the Group and ensure the effectiveness discharge of the Committee’s duties and responsibilities.
7. To review and verify the allocation of share options (if any) to eligible persons as being in compliance with the by-laws approved by the Board of Directors and shareholders of the Company.
8. The Audit Committee actions shall be reported to the Board of Directors with such recommendations as the Audit Committee deemed appropriate.
9. To review the policies and procedures for assessment of suitability and independence of external auditors.
10. To report to Bursa Malaysia Securities Berhad on any matter reported by it to the Board which has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad.

In the event of any vacancy in the Audit Committee, the Company shall fill in the vacancy within two (2) months, but in any case not later than three (3) months.

1. The Audit Committee shall meet at least four (4) times in a year or more frequently as circumstances required with due notice of issues to be discussed and shall record its conclusions in discharging its duties and responsibilities.
2. The quorum of the meeting is two (2) with majority of whom must be Independent Directors.
3. Upon the request of any member of the Audit Committee, the external auditors or the internal auditors, the Chairman of the Audit Committee shall convene a meeting of the Audit Committee to consider matters which should be brought to the attention of the directors or shareholders.
4. The external auditors and internal auditors have the right to appear and be heard at any meeting of the Audit Committee and shall appear before the Audit Committee when required to do so by the Audit Committee.
5. The Audit Committee may invite any Directors or any member of management or any employee of the Group who the Audit Committee thinks fit to attend its meetings to assist and to provide pertinent information as necessary.
6. The Company must ensure that other Directors and employees attend any particular Audit Committee meeting only at the Audit Committee’s invitation, specific to the relevant meeting.

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

1. the calling of meetings;
2. the notice to be given of such meetings;
3. the voting and proceedings of such meetings;
4. the keeping of minutes;
5. the custody, production and inspection of such minutes; and
6. the term of office and performance of the Audit Committee and each of its members shall be reviewed by the Nominating Committee on annual basis.

The Company Secretary or other appropriate senior official shall be the Secretary to the Audit Committee.