Terms of Reference for Audit Committee
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
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￣).
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.
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.
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:-
must be a member of the Malaysian Institute of Accountants
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
Accountants Act 1967; or
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.
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.
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.
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
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
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.
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.
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.
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.
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
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
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,
(e) have direct communication channels with the external
auditors and person(s) carrying out the internal audit function
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
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
Any changes in or implementation of major accounting policies
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
Compliances with accounting standards, regulatory and other
(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
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
(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
(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
the audit fee thereof;
(f) To review any resignation from external and internal
auditors and to nominate internal and external auditors of the
(g) To review with the Internal Auditors, the scope, functions,
competency and adequacy of resources, internal audit
and results, authority, processes or investigations undertaken
and the action taken on their
(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
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
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.