Audit and Risk Management Terms of Reference
The objective of the Audit and Risk Management Committee (“ARMC”) is to assist the Board of Directors (“the Board”) in fulfilling its statutory and fiduciary responsibilities towards maintaining adequate and effective risk management and internal control system.
MEMBERSHIP AND COMPOSITION
- Members of the ARMC shall be appointed from amongst the Board. The ARMC shall comprise at least three (3) Non-Executive directors, with majority of the members being independent directors.
- At least one (1) member of the ARMC shall be a member of the Malaysian Institute of Accountants (“MIA”) or shall fulfil such other requirement as prescribed in the Listing Requirements and a majority of the members of ARMC must be financially literate with sufficient financial experience in discharging their duties.
- No alternate Directors shall be appointed as a member of the ARMC.
- Members of the ARMC may relinquish their membership in the ARMC with prior written notice to the Company Secretary.
- In the event of any vacancy arising in the ARMC resulting in the number of members of the ARMC falling below three (3), the vacancy should be filled within three (3) months of that event arising.
- The Nomination Committee shall review the term of office and performance of the ARMC and each of its members annually to determine whether the ARMC has carried out its duties in accordance with its Terms of Reference.
- The term of appointment of the members of ARMC shall be determined by the Board.
The Chairman of ARMC, who shall be elected by members of the Committee, shall be an Independent Non-Executive Director.
The Chairman shall be responsible for ensuring that the entire Board is kept regularly informed about the ARMC’s work and, where necessary, must submit matters to the Board for decision.
The Company Secretary or such other person(s) as may be agreed to by the ARMC.
The Secretary shall be responsible for the preparation and circulation of the meeting agenda and accurately minuting all decisions of ARMC in consultation with the Chairman. The Secretary shall also be responsible for the timely tabling of all correspondence, reports and other information relevant to the ARMC’s activities.
- Frequency of meeting
The ARMC shall meet at least four (4) times during a financial year. Additional meetings may be convened if necessary to facilitate the ARMC to fulfill its responsibilities as set forth herein. ARMC shall conduct face-to-face meetings, however, meetings may also be conducted via telephone conferencing, video conferencing or other appropriate means as determine by the ARMC.
In addition, the ARMC may take action by unanimous written consent of its members, including dealing with matters by way of circular resolutions in lieu of convening a formal meeting.
The quorum for a meeting shall consist of a majority of independent directors and shall not be less than two (2) members. In the absence of a quorum, the meeting shall be adjourned to such other date and at such other time and venue as the ARMC may determine.
In the event the Chairman of ARMC is not present at the meeting, the members present shall elect a Chairman from among themselves.
- Notice of meeting and submission of paper
Notice of meeting and submission of meeting papers shall be circulated at least seven (7) days before each meeting.
Other Board members, the Group Managing Director, Group Chief Executive Officer, Chief Financial Officer, key representatives of external and internal auditors, and employees may attend the ARMC meeting by invitation. In addition, at least once a year, the ARMC shall meet with the external auditors without the presence of executive board members or management.
All resolutions of the ARMC shall be adopted by a simple majority vote, each member having one vote. In case of equality of votes, the Chairman of the ARMC shall have a second or casting vote.
- Minutes of Meetings
The Secretary of ARMC shall record all proceedings and minutes are to be prepared and circulated to the ARMC and the Board by the next following meeting. The Secretary of the ARMC shall distribute copies of the minutes of ARMC meeting to all its members at next meeting.
The minutes of meetings must be reviewed by the Chairman of ARMC before circulation to the members of ARMC.
Minutes of meetings shall be tabled to the Board of the Company for information.
The minutes of meetings and conclusions of the meetings should be entered into the Minutes Book kept by the Company Secretary of the Company. Such minutes shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting and if so signed, shall be conclusive evidence without any further proof of the facts thereon stated.
A resolution in writing, signed by all members of the ARMC, shall be as effectual as it had been passed at a meeting of the ARMC duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more members.
- In carrying out its duties and responsibilities, the ARMC shall, at the expenses of the Company:
- have authority to investigate any matter within its terms of reference;
- have the resources which are required to perform its duties;
- have full and unrestricted access to any information pertaining to the Company and its subsidiaries (“the Group”);
- have direct communication channels with external auditors and internal auditors;
- be able to obtain independent professional or other advice as necessary, and;
- be able to convene meetings with external auditors, internal auditors or both, without the presence of executive Board members or management, whenever necessary.
- Where the ARMC is of the view that a matter reported by it to the Board has not been satisfactory resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa”), the ARMC is authorized to promptly report such matters to Bursa.
- The ARMC shall review and update the Terms of Reference of ARMC from time to time and seek the Board’s approval in respect of such revision of the Terms of Reference.
DUTIES AND FUNCTIONS OF ARMC
The main duties and functions of the ARMC are as follows:
- Risk Management
- To ensure that a risk management structure is embedded throughout the Group; and
- To ensure that the risk management structure is consistently adopted throughout the Group
- To review the adequacy and effectiveness of risk management system currently in placed;
- Dealings with the External Auditors
- To review the adequacy of the audit plan and scope of work;
- To discuss with the external auditors their evaluation of the system of risk management and internal control;
- To consider and recommend to the Board the nomination of person or persons as external auditors and their fees;
- To review the independence and objectivity of the external auditors and their services, including non-audit services;
- To review the assistance given by the employees of the Company to the external auditors;
- To perform annual assessment on performance of external auditors;
- To review the significant audit findings arising from the interim and final audits together with the management letters and management responses;
- To discuss problems and reservations arising from interim and final audits, and any matters the auditors may wish to discuss (in the absence of management where necessary)
- To review any letter of resignation from external auditor; and
- To review and report whether there is reason (supported by grounds) to believe that the external auditor is not suitable for re-appointment.
- Dealings with Internal Auditors
- To review the adequacy of the scope, functions, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work. The ARMC shall undertake such review at least once a year to ensure the effectiveness of the internal audit function.
- To approve the internal audit plan and the internal audit charter, which defines the purpose, authority, scope and responsibility of the internal audit function
- To review the internal audit program and processes, the results of the internal audit program, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function.
- To assess the performance of the internal audit function periodically
- Financial Reporting
- To review the quarterly results and annual financial statements, prior to approval by the Board, focusing particularly on:
- Changes in or implementation of accounting policies and practices;
- Significant or unusual event
- Litigation that could affect the Group results materially
- Going concern assumptions; and
- Compliance with accounting standards and other legal requirements.
- To review corporate disclosure policies and procedures of the Group to ensure that they comply with the disclosure requirements as set out in the Listing Requirements of Bursa Securities.
- Related Party Transactions
To review the related party transactions and conflict of interest situations that may arise within the Group or the Company including any transactions, procedures or course of conduct that raises questions of management integrity.
- Reporting Responsibilities
- To promptly report to Bursa on matters conveyed to the Board that have not been satisfactorily resolved resulting in a breach of the Listing Requirements.
- To highlight significant matters and resolutions at each Board Meeting.
- Other responsibilities
To undertake any other duties and function as the ARMC considers appropriate or as directed by the Board from time to time.
APPROVAL OF TERMS OF REFERENCE
The Terms of Reference of ARMC shall be approved by the Board of the Company.