The primary objective of the Audit and Risk Management Committee is to assist the Board of Directors in fulfilling its responsibilities relating to accounting and reporting practices of the Group.
In addition, the Audit and Risk Management shall:-
- oversee and appraise the quality of the audits conducted both by the Company’s Internal and External Auditors;
- oversee risk management controls;
- maintain open lines of communication between the Board of Directors, the Internal Auditors and the External Auditors for the exchange of views and information, as well as to confirm their respective authorities and responsibilities; and
- determine the adequacy of the Group’s administrative, operating and accounting controls.
The Board of Directors shall appoint the Audit and Risk Management members from amongst the Directors of the Company. The Audit Committee shall comprise not less than three (3) members of whom:-
- All must be Non-Executive Directors, with a majority of them being Independent Directors;
- At least one (1) member of the Audit and Risk Management :-
- must be a member of the Malaysian Institute of Accountants;
- if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ financial related working experience and:-
- he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or
- he must be a member of one (1) of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or
- fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“BMSB”);
- No Alternate Director shall be appointed as a member of the Audit and Risk Management.
If a member of the Audit and Risk Management resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced to below three (3), the Board of Directors 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.
The members of the Audit and Risk Management shall elect a Chairman from among their number who shall be anIndependent Director. The Board shall, within three (3) months of a vacancy occurring in the chairmanship, elect a new Chairman from among their numbers who is an Independent Director.
The quorum of the Audit and Risk Management shall be two (2) of whom the majority of members present shall be Independent Directors.
ATTENDANCE AND MEETINGS
Apart from the members of the Audit and Risk Management who will be present at the meetings, the Audit and Risk Management may invite any member of the management, employees, other Directors and representatives of the External Auditors to be present at meetings of the Audit and Risk Management .
The Audit and Risk Management shall meet at least four (4) times a year and such additional meetings as the Chairman shall decide in order to fulfill its duties. In addition, the Chairman may call a meeting of the Audit and Risk Management if, a request is made by any Audit and Risk Management member, the Company’s Managing Director, or the Internal or External Auditors.
Minutes of each Audit and Risk Management meeting are to be prepared and sent to its members. The Chairman shall also report on each meeting to the Board.
The Company Secretary shall be the Secretary of the Audit and Risk Management .
FUNCTIONS AND RESPONSIBILITIES
The functions and responsibilities of the Audit and Risk Management shall include the following:-
- to consider the appointment of the external auditors, any questions of resignation or dismissal to discuss with the external auditors before the audit commences, the nature and scope of the audit, and the assistance given by the Company’s officers to the auditors and ensure coordination where more than one audit firm is involved;
- to discuss problems and reservations arising from the interim and final audits, and any matters the external auditors may wish to discuss (in the absence of management where necessary);
- to review the internal audit functions and programmes, consider the major findings of internal audit investigation and management’s response (in the absence of Management where necessary), and ensure coordination between the internal and external auditors and the internal auditors to report directly to the Committee and shall have access to the Chairman of the Committee;
- to review the adequacy of the competency and the relevance of the scope, functions and resources of internal audit and the necessary authority to carry out its work;
- to keep under review the effectiveness of internal control system, and in particular review the external and internal auditors’ management letters and management’s responses;
- to review the quarterly and annual financial statements before submission to the Board, focusing particularly on:
- any changes in accounting policies and practices
- major judgmental areas
- significant adjustments resulting from the audit
- the going concern assumption compliance with accounting standards
- compliance with stock exchange and legal requirements
- to make recommendations converning the appointment of the External Auditor and Internal auditor and their remuneration to the Board;
- to review any related party transaction and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity;
- to review the risk profile of the Group and the plans to mitigate business risks as identified from time to time;
- such other functions as authorized by the Board.
RIGHTS OF THE AUDIT AND RISK MANAGEMENT COMMITTEE
The Audit and Risk Management shall, wherever necessary and reasonable for its performance of its duties and in accordance with a procedure to be determined by the Board of Directors and at the Company’s cost:-
- have authority to investigate any matter within its terms of reference;
- have authority to request any information relevant to its activities from any employee of the Company or the Group and all employees are directed to cooperate with any request made by the Committee; and
- have the ability to consult independent experts where they consider it necessary to carry out their duties.
AUDIT AND RISK MANAGEMENT COMMITTEE REPORT
The Audit and Risk Management shall ensure that an Audit and Risk Management Report which is prepared at the end of each financial year complies with the following:-
- the Audit and Risk Management Report shall be clearly set out in the annual report of the Company;
- the Audit and Risk Management Report shall include the following:-
- the composition of the Audit and Risk Management , including the name, designation (indicating the chairman) and directorship of the members (indicating whether the Directors are independent or otherwise);
- the number of Audit and Risk Management meetings held during the financial year and details of attendance of each member;
- a summary of activities of the Audit and Risk Management in the discharge of its functions and duties for that financial year of the Company; and
- a summary of the activities of the internal audit function or activity.
REPORTING OF BREACHES TO BMSB
Where the Audit and Risk Management is of the view that a matter reported by it to the Board of Directors of the Company has not been satisfactorily resolved resulting in a breach of BMSB’s Listing Requirements, the Audit and Risk Management shall promptly report such matter to BMSB.
Adopted at Board of Director Meeting held on 28 March 2017