Terms of Reference

Composition of Audit Committee

Composition and Designation

  1. Mr Phong Hon Wai (Chairman)
    (Independent Director)
  2. Brig. Gen. (R) Dato’ Mohd Zaaba @ Nik Zaaba Bin Nik Daud(Member)
    (Non-Independent Non-Executive Director)
  3. Ms Lim Lay Ching (Member)
    (Independent Director)

Terms of Reference of Audit Committee

Composition of the Committee

  1. The Committee shall be appointed by the Board of Directors from amongst its members which fulfils the following requirements:-
    1. must compose of no fewer than three (3) members;
    2. must be non-executive director, with a majority of them being independent directors;
      (amended on 12/11/2008)
    3. at least one member of the audit committee:-
      1. must be a member of the Malaysian Institute of Accountants (“MIA”); or
      2. if he is not a member of the MIA, he must have at least three (3) 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 lI of the 1st Schedule of the Accountants Act 1967; or
      3. fulfils such other requirements as prescribed or approved by the Exchange.
      (amended on 28/1/2008)
    4. shall not comprise of any alternate director of the Company.
  2. In the event of any vacancy in an audit committee resulting in the non-compliance of the above, the Company must fill the vacancy within three (3) months.
  3. The Board of Directors must review the term of office and performance of the Committee and each of its members at least once every three (3) years to determine whether such Committee and members have carried out their duties in accordance with their terms of reference.

Duties and Responsibilities of the Committee

The Committee shall discharge the following functions:-
  1. review the following and report the same to the Board of Directors:-
    1. with the external auditor:-
      1. the audit plan;
      2. his evaluation of the system of internal controls; and
      3. his audit report;
    2. the assistance given by the employees of the Company to the external auditor;
    3. the adequacy of the scope, functions, competency and resources of the internal audit functions (which reports directly to the Committee) and that it has the necessary authority to carry out its work;
      (amended on 28/1/2008)
    4. the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;
    5. the quarterly results and year end financial statements, prior to the approval by the board of directors focusing particularly on:-
      1. changes in or implementation of major accounting policy changes;
      2. significant and unusual events; and
      3. compliance with accounting standards and other legal requirements;
      (amended on 28/1/2008)
    6. any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;
      (amended on 28/1/2008)
    7. any letter of resignation from the external auditors;
    8. whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for re-appointment; and
    9. allocation of options pursuant to a share scheme for employees.
      (amended on 4/5/2005)
  2. recommend the nomination of a person or persons as external auditors.
  3. report promptly to the Exchange where the Committee is of the view that a matter reported by it to the board of directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements.
    1. recommend the nomination of a person or persons as the members of Whistleblowing Committee (WBC);
    2. review the complaints presented by the WBC and decide on the appointment of appropriate party to carry out an investigation for significant cases;
    3. report the investigation results/findings and recommend the actions to be taken to the Board of Directors.
    (amended on 08/08/2016)

Rights of the Committee

The Committee shall, in accordance with a procedure to be determined by the board of directors and at the cost of the Company,:-
  1. have authority to investigate any matter within its terms of reference;
  2. have the resources which are required to perform its duties;
  3. have full and unrestricted access to any information pertaining to the Company;
  4. have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;
    (amended on 28/1/2008)
  5. be able to obtain independent professional or other advice; and
  6. be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.
    (amended on 28/1/2008)

Procedure of Committee Meeting

  1. The chairman shall be elected by the Committee from among their members who shall be an independent director

    If at any meeting the Chairman is not present within fifteen (15) minutes after the time appointed for holding the meeting, the members present shall choose one of their numbers, to act as chairman.

  2. The majority of members who must be the independent directors present shall be a quorum.
  3. The financial controller, the internal auditor and a representative of the external auditor shall normally attend the meeting. Other directors and employees attend any particular audit committee meeting only at the Committee’s invitation, specific to the relevant meeting. The Committee may invite any person to be in attendance to assist in its deliberations.

    Anyone of the Company Secretary shall act as the secretary of the Committee.

  4. Any member may at any time, and the financial controller and the Secretary shall on the requisition of any of the members or the external auditors summon a meeting.
  5. Meetings shall be held at least four (4) times a year to review the quarterly results and year end financial statements.
  6. (amended on 20/1/2005)

    A resolution in writing signed by all members of the Audited Committee for the time being entitled to receive notice of an Audit Committee meeting, shall be as valid and effectual as if it had been passed at a meeting of the Audit Committee duly convened and held.

    Any resolution coming within the provisions of this Regulation may consist of several documents in like form, each signed by one or more member of the Audit Committee.

    Any such document may be accepted as sufficiently signed by a member if transmitted to the Company by telex, telegram, cable, facsimile or other electrical written message purporting to include a signature of the member.

  7. Except in the case of an emergency, reasonable notice of every meeting shall be given in writing and the notice of each meeting shall be served to any member either personally or by sending it via fax or through the post or by courier to such member to his registered address as appearing in the Register of Directors, as the case may be.
  8. A resolution put to the vote of the meeting shall be decided on a show of hands. In the case of an equality of votes, the Chairman shall be entitled to a second or casting vote.
  9. The 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 shall be circulated to the Committee and the Board of Directors.
  10. The minutes shall be kept by the Company at the Office or the principal place of business in Malaysia of the Company, and shall be open to the inspection of any member without charge.

Composition of Nominating Committee

Members and Designation

  1. Mr Phong Hon Wai (Chairman)
    (Independent Non-Executive Director)
  2. Brig. Gen. (R) Dato’ Mohd Zaaba @ Nik Zaaba Bin Nik Daud(Member)
    (Non-Independent Non-Executive Director)
  3. Ms Lim Lay Ching (Member)
    (Independent Non-Executive Director)

Objective

  1. Selection of candidates and assessing of directors on an ongoing basis.
  2. Contribute towards ensuring the board composition meets the needs of the Company.

Terms of Reference of Nominating Committee

  1. The members of the Committee shall be elected by the Board of Directors from amongst themselves and the Committee shall consist of not less (Independent Non-Executive Director) than two (2) members who are exclusively non-executive directors, the majority of whom must be independent directors.

    In the event of any vacancy in the Committee resulting in the non-compliance of the above, the Company must fill the vacancy within three (3) months.

    The Board of Directors must review the term of office and performance of the Committee and each of its members at least once every three (3) years to determine whether the Committee and its members have carried out their duties in accordance with the Committee’s terms of reference.

  2. The Chairman of the Committee should be the senior independent director identified by the Board.
  3. The Secretary of the Committee shall be the Company Secretary of the Company.
  4. The Committee may meet together for the dispatch of business, adjourn and otherwise regulate their meetings, at least once a year or more frequently as deemed necessary.

    The Chairman may call for additional meetings at any time at his discretion.

    The Secretary shall at the requisition of the members of the Committee summon a meeting of the Committee and except in the case of an emergency, reasonable notice of every Committee meeting shall be given in writing.

  5. The quorum shall be two (2) members at least one of whom is an independent director.
  6. (amended on 20/1/2005)

    The Committee shall in accordance with a procedure or process to be determined by the Board of Directors and at the expense of the Company:-

    1. Develop, maintain and review the criteria to be used in the recruitment process and annual assessment of directors.
    2. Annually review the required mix of skills and experience and other qualities, including core competencies which non-executive and executive directors should have.
    3. Assess on an annual basis, the effectiveness of the board as a whole, the committees of the board and for assessing the contribution of each individual director.
    4. Be entitled to the services of a company secretary who must ensure that all appointments are properly made, that all necessary information is obtained from Directors, both for the Company’s own records and for the purposes of meeting statutory obligations as well as obligations arising from the Listing Requirements of Bursa Malaysia Securities Berhad or other regulatory requirements.
    5. Facilitate board induction and training programmes.
  7. In furtherance to their duties as members of the Nominating Committee of the Company, there should be an agreed procedure for the members, whether as a full Committee or in their individual capacity, to take independent professional advice at the Company’s expense, if necessary.
  8. The duties and responsibilities of the Committee are as follows,:-

    1. assessing and recommending to the Board of Directors, list of candidature of persons for selection as directors, appointment of directors to board committees and that women candidates are sought as part of the recruitment process.

      (The nomination and election process of board members should be disclosed in the annual report. Per the new Paragraph 15.08A of Main Market Listing Requirements as amended on 29/11/2012 and effective date of compliance on 1 June 2013, the listed issuer must provide, in its annual report, a statement about the activities of the nominating committee in the discharge of its duties for the financial year.)

      In making its recommendations, the Committee should assess the suitability of candidates and considerations be given to the competencies, commitment, contribution and performance as well as consider the candidates’:

      • skills, knowledge, expertise and experience;
      • character, integrity, professionalism;
      • competence and time to effectively discharge his role; and
      • in the case of candidates for the position of independent non-executive directors, the Committee should also evaluate the candidates’ ability and commitment to discharge such responsibilities/functions as expected from independent non-executive directors.

    2. To consider in making its recommendations, candidates for directorships proposed by the Chief Executive Officer and, within the bounds of practicality, by any other senior executive or any directors or shareholder.
    3. To annually assess the effectiveness of the Board of Directors as a whole, the committees of the Board and the contribution of each individual director taking into account, the required mix of skills and experience and other qualities including core competencies which non-executive directors should bring to the Board and thereafter, recommend its findings to the Board.
    4. To review of the succession plans of the Board.
    5. To review the training programmes for the Board.
    6. To facilitate board induction and training programmes.
    7. To act in line with the directions of the Board of Director.
    8. To consider and examine such other matters as the Committee considers appropriate.
  9. The 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 shall be circulated to the Committee and the Board of Directors.
  10. The minutes shall be kept by the Company at the Office or the principal place of business in Malaysia of the Company, and shall be open to the inspection of any member without charge.

Main Market Listing Requirements Stipulations on Nominating Committee

Paragraph 15.08A of Main Market Listing Requirements (“MMLR”)
  • as amended on 29/11/2012 and effective date of compliance on 1 June 2013.

  1. A listed issuer must establish a nominating committee which comprises exclusively of non-executive directors, a majority of whom must be independent.
  2. The nominating committee must have written terms of reference dealing with its authority and duties which must include the selection and assessment of directors.
  3. The listed issuer must provide, in its annual report, a statement about the activities of the nominating committee in the discharge of its duties for the financial year. Such statement must include how the requirements set out in (1)Paragraph 2.20A of the MMLR are met and contain the following information:
    1. The policy on board composition having regard to the mix of skills, independence and diversity (including (2) gender diversity) and the time commitment required to meet the needs of the listed issuer;
    2. The board nomination and election process of directors and criteria used by the nominating committee in the selection process; and
    3. The assessment undertaken by the nominating committee in respect of its board, committees and individual directors together with the criteria used for such assessment.

Pursuant to Recommendation 2.2. of the Malaysian Code of Corporate Governance 2012 (MCCG2012), the nominating committee should develop, maintain and review the criteria to be used in the recruitment process and annual assessment of directors including policies formalising its approach to diversify the Board.

(1)   Paragraph 2.20A of Main Market Listing Requirements (“MMLR”):
Every listed corporation must ensure that each of its directors, chief executive or chief financial officer has the character, experience, integrity, competence and time to effectively discharge his role as a director, chief executive or chief financial officer, as the case may be, of the listed corporation.
(2)   FAQ 15.20 referred the listed issuer’s attention to the announcement made by the Prime Minister Datuk Seri Najib Tun Razak on 27 June 2011 on the Government’s policy approved by the Cabinet that “women must comprise at least 30% of those in decision-making positions in the corporate section within 5 years” (i.e. by 2016).

Additional Information/Responsibilities for Notation of the Board of Directors As Recommended in MCCG 2012

The Board:-

  1. should establish clear functions reserved for the board and those delegated to management.
  2. should establish clear roles and responsibilities in discharging its fiduciary and leadership functions such as:
    • reviewing and adopting a strategic plan for the Company.
    • overseeing the conduct of the Company’s business.
    • identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures.
    • Succession planning.
    • overseeing the development and implementation of a shareholder communication policy of the Company.
    • reviewing the adequacy and integrity of the management information and internal controls system of the Company.
  3. should formalise ethical standards through a code of conduct and ensure its compliance.
  4. should ensure that the company’s strategies promote sustainability.
  5. should have procedures to allow its members access to information and advice.
  6. should ensure that it is supported by a suitably qualified and competent company secretary.
  7. should formalise, periodically review and make public its board charter on its corporate website.

    The Board Charter:

    • sets out the board’s strategic intent and outlines the board’s roles and responsibilities.
    • is a source reference and primary induction literature providing insights to prospective board members and senior management.
    • assist the board in the assessment of its own performance and that of its individual directors.
    • sets out the key values, principles and ethos of the Company as policies and strategy development are based on these considerations.
    • include the division of responsibilities and powers between the board and management, the different committees established by the board and between the chairman and the CEO.
    • set out processes and procedures for convening board meetings.
  8. should establish a nominating committee which should comprise exclusively of non-executive directors, a majority of whom must be independent.
  9. should establish formal and transparent remuneration policies and procedures to attract and retain directors.
  10. should undertake an assessment of its independent directors annually.
    (The tenure of an independent director should not exceed a cumulative term of nine years. Upon completion of the nine years, an independent director may continue to serve on the board subject to the director’s re-designation as a non-independent director.)
    The Board MUST justify and seek shareholders’ approval in the event it retains as an independent director, a person who has served in that capacity for more than nine years.
  11. MUST comprise a majority of independent directors where the chairman on the board is not an independent director.
    (The position of chairman and CEO should be held by different individuals and the chairman MUST be a non-executive member of the board.)
  12. should set out expectations on time commitment for its members and protocols for accepting new directorships.
  13. should ensure its members have access to appropriate continuing education programmes.
  14. should establish a sound framework to manage risks.
  15. should establish an internal audit function which reports directly to the audit committee.
  16. should ensure the Company has appropriate corporate disclosure policies and procedures.
  17. should encourage the Company to leverage on information technology for effective dissemination of information.
  18. should take reasonable steps to encourage shareholder participation at general meetings.
  19. should encourage poll voting.
  20. should promote effective communication and proactive engagements with shareholders.