Board Charter

Corporate Governance

Audit Committee

TERM OF REFERENCE OF AUDIT COMMITTEE

1. CONSTITUTION

The Board of Directors has established a Committee of the Board to be known as the Audit Committee.

2. COMPOSITION OF AUDIT COMMITTEE

2.1. The Audit Committee shall be appointed by the Board of Directors from amongst their members and shall consist of at least three (3) members.

2.2. All the Audit Committee members must be Independent Non-Executive Directors.

2.3. At least one (1) member of the Audit Committee:-

a. must be a member of the Malaysian Institute of Accountants; or
b. if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:
c. he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or
d. he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountant Act 1967; or
e. fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).

2.4. No alternate Director(s) shall be appointed as member(s) of the Audit Committee.

2.5. The members of the Audit Committee shall elect a Chairman from amongst its members who shall be an Independent Director.

2.6. The Chairman of the Board shall not be the Chairman of the Committee.

2.7. For engagement of a former key audit partner as member of the Committee, there must be a cooling-off period of at least two (2) years before being appointed as a member of the Committee.

3. MEETINGS

3.1 Quorum

The quorum for meeting of the Audit Committee shall be two (2) members of which the majority of members present must be Independent Directors.

3.2 Frequency of Meeting

At least four (4) meetings are held in a year. However, meetings are also held as and when required or upon the request of the external auditors to consider any matters that the external auditors believe should be brought to the attention of the Directors and/or shareholders.

3.3 Proceedings of Meeting

a. 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 the member either personally or by fax or e-mail or by post or by courier to his registered address as appearing in the Register of Directors or to the address provided by the Audit Committee member, as the case may be.

b. The Audit Committee meeting may be held at two (2) or more venues within or outside Malaysia using any technology that enable the Audit Committee members as a whole to participate for the entire duration of the meeting.

c. If at any meeting, the Chairman of the Audit Committee is not present within fifteen (15) minutes of the time appointed for holding the same, the members of the Audit Committee present shall choose one of their number who shall be an Independent Non-Executive Director to be Chairman of such meeting.

d. The Chairman shall report on each meeting to the Board.

e. Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes, the Chairman of the Audit Committee shall have a second or casting vote.

f. The Audit Committee meetings shall be governed by the provisions of the Company’s Constitution relating to meetings unless otherwise provided for in this Terms of Reference.

3.4 Attendance at Meeting

a. The presence of external auditors and internal auditors at any meeting of the Audit Committee can be requested if required by the Audit Committee.

b. Other members of the Board and officers and service providers of the Company may attend the meeting (specific to the relevant meeting) upon the invitation of the Audit Committee.

3.5 Keeping of Minutes

Minutes to be signed by the Chairman of the Audit Committee Meeting at which the proceedings were had or by the Chairman of the next succeeding meeting shall be evidence of the proceedings to which it relates.

4. AUTHORITY

4.1 The Audit Committee shall in accordance with the procedure determined by the Board and at the cost of the Company:-

a. have authority to investigate any matter within the terms of reference;
b. have the resources which the Audit Committee requires to perform its duties;
c. have full and unrestricted access to any information which the Audit Committee requires in the course of performing its duties.
d. have direct communication channels with the external auditors and person carrying out the internal audit function;
e. be able to obtain independent professional or other advice in the performance of its duties at the cost of the Company; and
f. be able to convene meetings with the external auditors, internal auditors or both without the attendance of other directors and service providers of the Company at least two (2) times a year. Other directors or service providers may attend meetings only at the Audit Committee’s invitation.

5. DUTIES AND RESPONSIBILITIES

5.1 The Audit Committee members are expected to be financially literate and have sufficient understanding of the Company’s business.

The duties and responsibilities of the Audit Committee shall review the following and report the same to the Board of Directors:-

a. To review the nomination of external auditors and the external audit fee;
b. To discuss with the external auditors, the nature, scope and quality of external audit plan/arrangements;
c. To review the evaluation of the systems of internal control with the external auditors;
d. To review quarterly results and year end financial statements of the Company, prior to approval by the Board, focusing in particular on the going concern assumption, compliance with accounting standards and regulatory requirements, any changes in accounting policies and practices, significant issues and unusual events arising from the audit and major judgement issues;
e. To review the external auditors’ audit report on the financial statement;
f. To review any management letter sent by the external auditors to the Company and the service providers’ response to such letter;
g. To review any letter of resignation from the external auditors;
h. To consider and review whether there is reason (supported by grounds) to believe that the Company’s external auditors are not suitable for re-appointment;
i. To review the assistance given by the Company’s officers and service providers to the external auditors;
j. To discuss problems and reservations arising from the interim and final audits, and any matter the external auditors may wish to discuss;
k. To establish policies and procedures to assess the suitability, objectivity and independence of external auditors including the competency, audit quality and resource capacity of the external auditors in relation to the audit;
l. To assess suitability, objectivity and independence of the external auditors annually;
m. To establish policies and procedures in governing the circumstances for contracts of non-audit services to be entered with external auditors;
n. To obtain written assurance from the external auditors confirming that they are, and have been independent throughout the conduct of the audit engagement in accordance with relevant professional and regulatory requirements;
o. To review the effectiveness, competency and resources of the internal audit function;
p. To review the internal audit programme and results of the internal audit process or investigation undertaken and whether or not appropriate action is taken on the recommendation of the internal audit function;
q. To review the follow up actions by the service providers on the weakness of internal accounting procedures and controls;
r. To review the adequacy and effectiveness of the risk management frameworks including all areas of significant financial risk and the arrangements in place to mitigate those risks to acceptable levels;
s. To review the assistance and co-operation given by the Company’s officers and service providers to the internal auditors;
t.To review any appraisal or assessment of the performance and competency of persons carrying out the internal audit function;
u. To deliberate significant audit and accounting matters highlighted and to discuss significant financial matters at length to ensure compliance with accounting standards and policies;
v. To review the resignation of the internal auditors and provide the resigning internal auditors an opportunity to submit reasons for their resignation; and
w. To ensure there is co-ordination between internal and external auditors.

6. ROLES AND RIGHTS OF THE AUDIT COMMITTEE

6.1 The roles and rights of the Audit Committee are:-

a. to consider and review any significant transactions which are not within the normal course of business and any related party transactions and conflict of interest situation that may arise within the Company;
b. to report to Bursa Securities on any matter reported to the Board of the Company which has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Securities; and
c. to carry out any other function that may be mutually agreed upon by the Audit Committee and the Board which would be beneficial to the Company and ensure the effective discharge of the Audit Committee’s duties and responsibilities.

7. RETIREMENT AND RESIGNATION OF MEMBER OF AUDIT COMMITTEE

7.1 Retirement/Resignation

A member of the Audit Committee who wishes to retire or resign should provide sufficient written notice to the Company so that a replacement may be appointed before he leaves.

7.2 Vacancy

In the event of any vacancy in Audit Committee resulting in the non-compliance of subparagraphs 15.09(1) and 15.10 of the Main Market Listing Requirements of Bursa Securities, the Company shall fill the vacancy not later than three (3) months.

8. CIRCULAR RESOLUTIONS

8.1 A resolution in writing signed or approved via letter, telex, facsimile, email by all Committee members shall be effective for all purposes as a resolution passed at a meeting of the Audit Committee duly convened, held and constituted. Any such resolution may be contained in a single document or may consist of several documents all in the like form signed by one or more members.

9. SECRETARY

9.1 The Company Secretary of the Company or such substitute as appointed by the Directors or the Audit Committee from time to time shall act as the Secretary of the Audit Committee.

9.2 The Company Secretary shall have the following responsibilities:-
(i) ensure all meetings are arranged and held accordingly;
(ii) draw up meeting agenda in consultation with the Chairman and circulate the agenda together with the relevant papers within five (5) days prior to each meeting to enable full and proper consideration be given to issues.
(iii) prepare the minutes of the Committee meetings and record the conclusions of the Committee in discharging its duties and responsibilities;
(iv) ensure the minutes are endorsed by the Chairman before circulating promptly to all members of the Committee and make the same available to Board members who are not members of the Committee; and
(v) ensure that the minutes of the Committee meetings are properly produced and kept at the registered office of the Company. The minutes shall be open for inspection by the Board. Any request by other persons to inspect the minutes shall be subjected to the approval of the Committee.

10. REVIEW OF THE TERMS OF REFERENCE

10.1. This Terms of Reference shall be reviewed periodically as and when necessary.

10.2. Any revision of amendment to this Terms of Reference, as proposed by the Committee or any third party, shall first be presented to the Board for its approval.

10.3. Upon the Board’s approval, the said revision or amendment shall form part of this Terms of Reference and this Terms of Reference shall be considered duly revised or amended. The Terms of Reference was subsequently updated on 9 April 2018.

10.4. The Terms of Reference is made available for reference in the Company’s website at www.icapital.my.