AUDIT AND RISK MANAGEMENT COMMITTEE

TERMS OF REFERENCE

The Terms of Reference of the Audit and Risk Management Committee have been revised to be in line with the Malaysia Code on Corporate Governance (“Code”) and amendments made to the Listing Requirements of Bursa Malaysia Securities Berhad for the Main Market (“MMLR”). The revised Terms of Reference of the Audit and Risk Management Committee are as follows:

• a) Composition of Audit and Risk Management Committee

  
  

  The Audit and Risk Management Committee shall be appointed from amongst the Board of Directors and shall comprise at least three (3) members who are Non-Executive Directors, a majority of whom shall be independent directors. No alternate director shall be appointed as a member of the Audit and Risk Management Committee.

  
  

  At least one (1) member of the Audit and Risk Management Committee must be a member of the Malaysian Institute of Accountants or if he is a not a member of the Malaysia Institute of Accountants, he must have at least 3 years’ working experience and;

  1. He/ she must have passed the examination specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or

  2. He/ she must be a member of the associations of accountants as specified in Part II of the 1st Schedule of the Accountant Act 1967; or

  fulfills such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad.

  
  

  In the event of any vacancy with the result that the number of members is reduced to below three (3), the vacancy must be filled within three (3) months.

• b) Chairman

  
  

  The Chairman of the Audit and Risk Management Committee shall be appointed by the Board, or failing which, by the members of the Audit and Risk Management Committee themselves. The Chairman shall be an Independent Director. In event of the Chairman’s absence, the meeting shall be chaired by another Independent Director.

  
  

• c) Secretary

  
  

  The Company Secretary shall be the Secretary of the Audit and Risk Management Committee and shall be responsible in conjunction with the Chairman, for drawing up the agenda and circulating it prior to each meeting.

  
  

  The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them the Committee Members.

   

• d) Meetings

  
  

  The quorum for a meeting shall be two (2) members, provided that the majority of the members present at the meeting shall be independent directors.

  
  

  The internal and external auditors may appear at any meeting at the invitation of the Audit and Risk Management Committee and shall appear before the Committee when required to do so by the Audit and Risk Management Committee. The internal and external auditors may also request a meeting if they consider it necessary.

• e) Rights

  
  

  The Audit and Risk Management Committee shall:

  
  

  1. have explicit authority to investigate any matter within its terms of reference;

  2. have the resources which it needs to perform its duties;

  3. have full and unrestricted access to any information which it requires in the course of performing its duties;

  4. have unrestricted access to the chief executive officer and the chief financial officer;

  5. have direct communication channels with the external and internal auditors;

  6. be able to obtain independent professional or other advice in the performance of its duties at the cost of the Company; and

  7. the Chairman shall call for a meeting upon the request of the external auditors.

  In the event of any vacancy with the result that the number of members is reduced to below three (3), the vacancy must be filled within two (2) months, but in any case not later than three (3) months.

• f) Duties

  
  

  The duties of the Audit and Risk Management Committee shall include a review of:

  1. To review with the external auditors on:

     • the audit plan, its scope and nature;

     • the audit report;

     • the results of their evaluation of the accounting policies and systems of internal accounting controls within the Group; and

     • the assistance given by the officers of the Company to external auditors, including any difficulties of disputes with Management encountered during the audit.

  2. To review Enterprise Risk Management (“ERM”) Framework for the Group.

  3. To review the Group’s risk management process, including adequacy of the Group’s overall control environment and controls in selected areas representing significant financial and business risks.

  4. To review the adequacy of the scope, functions, competency and resources and set the standards of the internal audit function.

  5. To provide assurance to the Board of Directors on the effectiveness of the system of internal control and risk management practices of the Group.

  6. To review the internal audit programme and results of the internal audit process and whether or not appropriate action is taken on the recommendations of the internal auditors.

  7. To review with management:

     
     

     • Audit reports and management letter issued by the external auditors and the implementation of audit recommendation;

     • Interim financial information; and

     • The assistance given by the officers of the Company to external auditors.

  8. To monitor related party transactions entered into by the Company or the Group and to determine if such transactions are undertaken on arm’s length basis and normal commercial terms and on terms not more favorable to the related parties than those generally available to the public, and to ensure that the Directors report such transactions annually to shareholders via the annual report, and to review conflicts of interest that may arise within the Company of the Group including any transaction, procedure or course of conduct that raises questions of management integrity.

  9. To review the quarterly report on consolidated results and annual financial statement prior to submission to the Board of Directors, focusing particularly on:

     
     

     • Changes in or implementation of major accounting policy and practices;

     • Significant and/ or unusual matters arising from the audit;

     • The going concern assumption;

     • Compliance with accounting standards and other legal requirements; and

     • Major areas.

  10. To consider the appointment and/ or re-appointment of internal and external auditors, the audit fee and any questions of resignation or dismissal including recommending the nomination of person of person as auditors.

  11. (xi) To verify any allocation of options in accordance with the employees share scheme of the Company, at the end of the financial year.