Composition

• The Audit & Risk Committee shall be appointed by the Board from among their number and shall consist of at least three members, all of whom shall be Non-Executive Directors, with a majority of them being Independent Directors and are able to understand matters under the purview of the Audit & Risk Committee, including the financial reporting process.
• At least one member of the Audit Committee:-
  • must be a member of the Malaysian Institute of Accountants; or
  • if he is not a member of Malaysian Institute of Accountants, he must have at least three years’ 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 of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or
  • he must fulfill such other requirements as prescribed or approved by BMSB.
• No alternate director shall be appointed as a member of the Audit Committee.
• The Audit & Risk Committee shall elect among their numbers a Chairman who shall be an Independent Non-Executive Director. In his absence, the members present shall elect one amongst themselves to be the Chairman of the meeting.
• The Chairman of the Audit & Risk Committee must not the Chairman of the Board.
• A former key audit partner must observe a cooling-off period of at least Three (3) years before being appointed as a member of the Audit & Risk Committee.
• Any vacancy in the Committee resulting in the non-compliance with requirements on composition of Audit & Risk Committee and the election of an independent chairman of the Audit & Risk Committee, must be filled within three (3) months.
• All members of the Audit & Risk Committee should undertake continuous professional development to keep themselves abreast of relevant developments in accounting and auditing standards, practices and rules.

Authority
The Audit & Risk Committee is authorized by the Board to investigate any activity of the Group within its terms of reference and they shall be provided with the resources that are required to perform their duties. The Audit & Risk Committee has full and unrestricted access to any information pertaining to the Group and can communicate directly with the external and internal auditors. In discharging their duties, the Audit & Risk Committee is entitled to obtain external legal or other independent professional advice, if required.

Meetings
The Audit & Risk Committee shall meet at least four times a year.

The quorum for a meeting shall be at least two members where a majority of members present must be Independent Directors.

Questions arising at any meeting shall be determined by a majority of votes. The Chairman of the Committee, or the Secretary, on the requisition of any member, the Internal Auditor or the External Auditors, shall any time summon a meeting of the Committee by giving reasonable notice unless all the members of the Committee waive notice of a meeting. Notice of a meeting may be given in writing or by any other means of communication.

The Executive Directors shall normally attend the meetings but may be asked to leave a meeting as and when deemed necessary by the Audit & Risk Committee. A representative of the external auditors shall attend the meeting to discuss and finalise matters relating to the annual financial statements and such other matters as may be deemed necessary by the Audit & Risk Committee.

The Chairman of the Committee shall be entitled, where deemed appropriate, to invite any other person to a meeting of the Committee at which that person’s expertise may be required having regard to the subject matter to be discussed.

The Audit & Risk Committee should meet with the external auditors without any executive Board members present at least twice a year.

The Company Secretary is the Secretary to the Audit & Risk Committee. The Audit & Risk Committee Members are provided with the agenda and relevant committee papers at least 5 business days before each Meeting. Minutes of the Audit & Risk Committee Meeting are distributed to the Board for notation and the Chairman of the Audit & Risk Committee reports to the Board on key issues discussed.

Minutes
Minutes of the meetings shall be duly entered into the books provided for the purpose of all resolutions and proceedings of all meetings of the Audit & Risk Committee. The minutes shall be formally tabled to the Board for noting and action. All recommendations of the Committee shall be submitted to the Board for approval.

Duties
The duties of the Audit & Risk Committee shall be to review and report the same to the Board:-

• Nomination and appointment of the external auditors, audit fee and question of resignation or dismissal of the external auditors;
• Annual assessment on the suitability, objectivity and independence of the external auditors;
• The external auditors’ audit plan and report, areas of concern arising from the audit and any other matters as the external auditors may wish to discuss (without the presence of the management, if necessary);
• The quarterly and annual financial statements before submission to the Board for approval, focusing particularly on:-
  • changes in or implementation of major accounting policies and practices;
  • significant adjustments arising from the audit;
  • significant matters highlighted including financial reporting issues, significant judgments made by management, significant and unusual events or transactions and how these matters are addressed;
  • going concern assumption; and
  • compliance with applicable approved accounting standards in Malaysia.
• Financial reporting process, detection of financial irregularities, to ascertain that the financial statements are consistent with operational information;
• The adequacy of the scope, functions, budget, competency and resources of the Internal Audit Function and that it has the necessary authority to carry out its work;
• The audit plan and work program of the Internal Audit Function;
  • Findings of the internal audit work and management action taken on the recommendations of the Internal Audit Function;
  • Appraisal or assessment of the performance of members of the Internal Audit Function;
  • Appointment of senior staff members of the Internal Audit Function or the outsource of the Internal Audit Function;
  • Termination of senior staff members of the Internal Audit Function or the outsource of the Internal Audit Function;
  • Being informed of any resignation of internal audit staff members or the outsource of the Internal Audit Function and to provide the resigning staff member or the outsource of the Internal Audit Firm an opportunity to submit his/her reasons for resigning;
  • Extent of co-operation and assistance given by the employees to the external and internal auditors;
  • To review and recommend the risk management policies and strategies and assists the Board in fulfilling its corporate governance, management and statutory responsibilities in order to manage the overall risk exposure of the company and its group of companies.
  • Reviewing the Strategic Risk Register and evaluating and endorsing the effectiveness of systems for assessing and managing risk, including information risk.
  • The propriety of any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions or management integrity; and
  • Promptly report such matter to the Exchange if the Audit & Risk Committee is of the view that the matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements.
  • Any other functions as directed by the Board.
  • These Terms of Reference should be reviewed annually and be amended as required, subject to the approval of the Board.