AUDIT COMMITTEE

AUDIT COMMITTEE

PRIMARY PURPOSES

The Audit Committee shall :

1. provide assistance to the Board in fulfilling its fiduciary responsibilities relating to the corporate accounting and practices for the Company and all its wholly and majority owned subsidiaries (“Group”).
   
2. improve the Group’s business efficiency, the quality of the accounting function, the system of internal controls and audit function and strengthen the confidence of the public in the Group’s reported results.
   
3. maintain through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as internal auditors.
   
4. enhance the independence of both the external and internal auditors functions through active participation in the audit process.
   
5. strengthen the role of the independent Directors by giving them a greater depth of knowledge as to the operations of the Company and the Group through their participation in the Committee.
   
6. act upon the Board of Directors’ request to investigate and report on any issues or concerns in regard to the management of the Group.
   

COMPOSITION

The Audit Committee shall be appointed by the directors from amongst themselves which fulfils the following requirements:

1. The Audit Committee must be comprised of no fewer than three (3) members;

2. All Audit Committee members must be non-executive directors, with a majority of them being independent directors;

3. At least one (1) member of the Audit Committee

(i) must be a member of the Malaysian Institute of Accountants; or

(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and:

(aa) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

(bb) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

(iii) fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad (“Bursa Securities”).

4. The Chairman of the Audit Committee shall be an independent director; and

5. The alternate director shall not be a member of the Audit Committee.

AUTHORITY

The Audit Committee was formed under Chapter 15, Part C, Rule 15.09 of the Bursa Securities Listing Requirements for ACE Market (“MMLR”). The Audit Committee shall in accordance with the procedure determined by the Board and at the cost of the Company:-

1. (a)  have explicit authority to investigate any matter within its terms of reference;
   (b)  have the resources which are required to perform its duties;
   (c)  have full and unrestricted access to any information which it requires in the course of performing its duties;
   (d)  have unrestricted access to the Chief Executive Officer and the Chief Financial Officer;
   (e)  have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity (if any);
   (f)  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
   (g)  be able to convene meetings with the external auditors excluding the attendance of the executive members of the Company, whenever deemed necessary.
   

FUNCTIONS AND DUTIES

The functions of the Audit Committee are as follows:
1. External Audit Function 

1. a) To review with the external auditor the following and report the same to the Board: 
   1. i)  the external audit planning memorandum; 
      ii) the evaluation of the Group’s system of internal control; and 
      iii) the external audit report; 
      
2. b) To consider the nomination and recommend the appointment of the external auditor and the agreement of audit fees; 
   c)  To review the scope of audit and the general extent of the external auditor coverage; 
   d)  To review the assistance provided by the Group’s employees to the external auditor and to provide a communication channel between the Board and the external auditor; 
   e) To monitor the effectiveness of the external auditor’ performance and their independence and objectivity; 
   f) To review all the significant issues raised by the external auditor during the interim and final audit and management’s responses, including updates on the management’s response to recommendations raised from previous audit;
   g) To review any letter of resignation from the external auditor of the Company and investigate on the rationale of resignation; 
   h) To review whether there is any reason (supported by grounds) to believe that the external auditor is not suitable for reappointment;
   i) To review the policies and procedures for assessment of sustainability and Independent of external auditors; and 
   j) To review the policies and procedures governing the provision of non-audit services by external auditors.
   

2.Internal Audit Function 

1. a) To ensure the objectivity and independence of the appointed internal auditor and take cognizance of resignation or termination of audit firm; 
   b)  To ensure the adequacy of the scopes, functions, competency and availability of resources and necessary independent authority to carry out its internal audit works;  
   c)  To review internal audit plan and programs, audit processes or investigations undertaken and the result of the internal audit findings; 
   d) To review the coordination of the external auditor with internal auditor;
   e) To review the internal audit report and evaluate the adequacy and effectiveness of the Group’s system of internal control and whether appropriate and prompt remedial actions are taken by the management based on the recommendations; and 
   f) To ensure major issues raised from the internal audit findings are brought to the Board’s attention and to ensure that the issues are resolved.
   

3.Financial Reporting Practices

1. To Review the quarterly results and year end financial statements, prior to the approval by the board of directors, focusing particularly on the following:
   3.1) Changes in or implementation of major accounting policy changes; 
   3.2)  Significant matters highlighted including financial reporting issue;   
   3.3)  Significant judgements made by management; 
   3.4) Significant and unusual events for transaction and how these matters are addressed; and 
   3.5) Compliance with accounting standard and other legal requirements. 
   

4.Related Party Transaction

1. To review any any related party transactions and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions of management integrity.
   

5.Annual Reporting to the Board of Director 

1. To prepare annual report to the Board the activities that it has conducted during the financial year. 
   

6.Investigation

1. To review the Company’s general policies and procedures and act upon any request of the Board to investigate and report on any issues or concerns pertaining to the management of the Group.  
   

RETIREMENT AND RESIGNATION

In the event of any vacancy in the Audit Committee resulting in the noncompliance of sub-Rule 15.09(1) of the AMLR, the Company shall fill in the vacancy within three (3) months. 

MEETINGS

1. The 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. Quorum shall be by majority of the members who are Independent Directors.
   
3. Upon the request of any member of the Committee, the external auditors or the internal auditors, the Chairman of the Committee shall convene a meeting of the 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 Committee and shall appear before the Committee when required to do so by the Committee.
   
5. The Committee may invite any Board member or any member of management or any employee of the Company who the 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.
   
7. The Committee shall meet with the external auditors, the internal auditors or both without executive board members present when necessary. 
   

PROCEDURES OF AUDIT COMMITTEE

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

(a) the calling of meetings;
(b) the notice to be given of such meetings;
(c) the voting and proceedings of such meetings;
(d) the keeping of minutes; and
(e) the custody, production and inspection of such minutes.

SECRETARY

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