INVESTOR RELATIONS

 
Audit Committee

 

Terms of Reference for Audit Committee

1. Objectives

The principal objectives of the Audit Committee are to assist the Board of Directors in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the Group. In addition, the Audit Committee shall:-

  1. Provide assistance to the Board fulfilling its fiduciary responsibilities and assure the shareholders of the Group that the Directors of TSB have complied with Malaysian financial standard and required disclosure policies developed and administered by Bursa Malaysia Securities Berhad (^Bursa Securities ̄).

  2. Ensure transparency, integrity and accountability in the Group¨s management of principal risks, the quality of the accounting function, the system of internal controls and audit function and strengthen public¨s confidence in the Group¨s reported results.

  3. Maintain through regularly scheduled meetings, a direct line of communication among the Board, senior management, external auditors and internal auditors and to exchange views and information.
     

2. Composition

The Committee shall be appointed by the Board from amongst its Directors and shall be no fewer than three (3) members, majority of whom shall be Independent Directors. All members of the Audit Committee must be non-Executive Directors.

In this respect, the Board adopts the definition of ^independent director ̄ as defined under the Listing Requirements of Main Market of Bursa Securities.

All members of the Audit Committee shall be financially literate and at least one of the members 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 MIA, he must have at least three (3) years¨ of working experience; and
    a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accounts Act 1967; or
    b) he must be a member of one of the Associations of the Accountants specified in Part II of the 1st Schedule of
        the Accountants Act 1967; or

  3. fulfils such other requirements as prescribed or approved by the Exchange.

The Board must ensure that no alternate director shall be appointed as a member of the Audit Committee.

The terms of office and performance of the Committee and its members shall be reviewed by the Nomination Committee annually to determine whether the members have carried out their duties in accordance with their terms of reference.

Retirement and resignation
If a member of the Audit Committee resigns, dies, or for any reason ceases to be a member resulting in non­compliance to the composition criteria as stated in the above, the Board shall within three (3) months of the event appoint such number of the new members as may be required to fill the vacancy.
 

3. Chairman

The chairman, who shall be elected by the members of the Committee, shall be an Independent Non-Executive Director. If the Chairman of the Audit Committee resigns, dies, or for any reason cease to be the Chair of the Audit Committee, the other members of the Audit Committee shall amongst themselves elect a new Chairman of the Committee.

In the absence of the Chairman of the Audit Committee, the other members of the Audit Committee shall amongst themselves elect a Chairman who must be independent director to chair the meeting.
 

4. Secretary

The Company Secretary shall be the Secretary of the Audit Committee and as a reporting procedure, the Minutes shall be circulated to all members of the Board.

The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Committee members and to other members of the Board.
 

5. Meeting

The Committee shall meet at least four (4) times a year, with each meeting planned to coincide with key dates in the Company's financial reporting cycle, or more frequently as circumstances dictate.

Upon the request of the external auditors, the Chairman of the Audit Committee shall convene a meeting of the Audit Committee to consider any matter the external auditors believes should be brought to the attention of the directors or shareholders.

Notice of Audit Committee meetings shall be given to all the Audit Committee members unless the Audit Committee waives such requirement.

The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as the Chairman, the Finance Director, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Company.

The Finance Director, the head of internal audit and a representative of the external auditors should normally attend meetings. Other Board members and employees may attend meetings upon the invitation of the Audit Committee. However, the Audit Committee shall meet with the external auditors without executive Board members present and whenever necessary.

Questions arising at any meeting of the Audit Committee shall be decided by a majority of votes of the members present, and in the case of equality of votes, the Chairman of the Audit Committee shall have a second or casting vote.
 

6. Minutes

Minutes of each meeting shall be kept at the registered office and distributed to each member of the Audit Committee and also to the other members of the Board. The Audit Committee Chairman shall report on each meeting to the Board.

The minutes of the Audit Committee meeting shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting.
 

7. Quorum

The quorum for any meeting shall be the majority of the members present who are Independent Directors.
 

8. Circular Resolutions

A resolution in writing signed or approved by letter, telegram, telex or telefax or other electronic/digital means (including but not limited to electronic mail) by all the Audit Committee Members and who are sufficient to form a quorum, shall be as valid and effectual as if it had been passed at a Meeting of the Audit Committee duly called and constituted. All such resolutions shall be described as "Audit Committee Members' Resolutions in Writing" and shall be forwarded or otherwise delivered to the Secretary without delay, and shall be recorded by him in the Company's Minutes Book. Any such resolution may consist of several documents in like form, each signed by one (1) or more Audit Committee Members.
 

9. Reporting

The Audit Committee shall report to the Board of Directors, either formally in writing, or verbally, as it considers appropriate on the matters within its terms of reference at least once a year, but more frequently if it so wishes.

The Audit Committee shall report to the Board of Directors on any specific matters referred to it by the Board for investigation and report.
 

10. Authority

The Committee is authorised by the Board to investigate any work within its terms of reference and shall have unrestricted access to both the internal and external auditors and to all employees of the Group. The Committee shall have the authority:-

(a) have explicit authority to investigate any matter within its terms of reference, the resources to do so, and full access to
     information. All employees shall be directed to co-operate as requested by members of the Audit Committee.

(b) convene meetings with the External Auditors without the presence of Executive Directors, Management or other
     employees of the Group unless specifically invited by the Committee.

(c) have full and unlimited/ unrestricted access to all information and documents/ resources pertaining to the Group and
     Management which are required to perform its duties as well as to the internal and external auditors and senior
     management of the Company and Group. All employees of the Group are required to comply with requests made by
     the Audit Committee.

(d) obtain independent professional or other advice and to invite persons with relevant experience to attend the meetings,
     if necessary.

(e) have direct communication channels with the external auditors and person(s) carrying out the internal audit function or
     work (if any).

(f) where the Audit Committee is of the view that the matter reported by it to the Board has not been satisfactorily resolved
     resulting in a breach of the Listing Requirements, the Audit Committee shall promptly report such matter to Bursa
     Securities.
 

11. Duties and Responsibilities

The duties and responsibilities of the Committee shall be:-

(a) Review the quarterly results and year-end financial statements before submission to the Board for approval, focusing
     particularly on:-

  • Any changes in or implementation of major accounting policies and practices;

  • Going concern assumptions;

  • 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; and

  • Compliances with accounting standards, regulatory and other legal requirements.
     

(b) Review and discuss with external auditors of the following:

  • External audit plans and scope of work;

  • External audit reports, management's response and actions taken;

  • External audit evaluation of the system of risk management and internal controls; and

  • Problems and reservations arising from interim and final audits and any matters them external auditors may wish to discuss, in the absence of other directors and management, if necessary.
     

(c) To establish policies governing the circumstances under which contracts for the provision of non-audit services can be
     entered into and procedures that must be followed by the external auditors.

(d) Consider any related party transactions and situations where a conflict of interest may arise within the Group.

(e) To review the suitability and independence of the External Auditors for recommendation to the Board for re­
     appointment and the audit fee thereof;

(f) To review any resignation from external and internal auditors and to nominate internal and external auditors of the
     Group.

(g) To review with the Internal Auditors, the scope, functions, competency and adequacy of resources, internal audit
     programmes and results, authority, processes or investigations undertaken and the action taken on their
     recommendations.

(h) To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish
     to discuss (in the absence of management, where necessary).

(i) To do the following, in relation to the internal audit function:-

  • consider and approve the appointment of the internal auditors, the audit fee and any question of resignation or dismissal

  • 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

  • review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function

  • review the internal audit plan, consider the internal audit reports and findings of the internal auditors, fraud investigations and actions and steps taken by Management in response to audit findings

  • review any appraisal or assessment of the performance of members of the internal audit function
     

(j) To consider any related party transactions 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.

(k) To report its findings on the financial and management performance, and other material matters to the Board.

(l) To consider the major findings of internal investigations and management's response.

(m) To verify the allocation of Employees' Share Option Scheme ("ESOS") in compliance with the criteria as stipulated in
      the by-laws of ESOS of the Company, if any.

(n) To review the adequacy and effectiveness of risk management, internal control and governance systems.

(o) To monitor the Company's compliance with relevant laws, regulations and code of conduct.

(p) To consider any other areas as may be directed by the Board.
 

 

 
 
 

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