TERMS OF REFERENCE

Purpose

The objective of the ARMC is to assist the Board to review the adequacy and integrity of Group’s financial administration and reporting, internal control and risk management systems, including the management information system and systems of compliance with the applicable laws, regulations, rules, directives and guidelines.

 

Balance and Composition

  1. The members of the ARMC are to be appointed by the Board and shall comprise of at least three (3) members, all of whom must be Non-Executive Directors, with a majority of them being Independent Directors.
  1. None of the members of the ARMC shall be an Alternate Director. Members of the ARMC shall elect a Chairman from among themselves who is an Independent Non-Executive Director.
  1. At least two (2) members of the ARMC must be financially literate with sufficient financial experience and ability and at least one member of ARMC must be an Accountant or have such other qualification as defined by the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“BMSB”).
  1. The ARMC shall have a mixture of expertise and experience, including an understanding of the industry(ies) in which the Group operates.
  1. A Member of the ARMC may relinquish their membership in the ARMC with prior written notice to the Company Secretary.
  1.  The Nomination Committee shall review the terms of office of the ARMC annually.
  1. Any vacancy in the Committee resulting in the non-compliance with requirements on composition of ARMC and the election of an independent chairman of the ARMC, must be filled within three (3) months of it arising.

 

Authority

  1. In carrying out its duties and responsibilities, the ARMC shall, at the expense of the Company:

(1.1) have the authority to investigate any activity within its Terms of Reference;

(1.2) have full, free and unrestricted access to the Group’s records, properties, personnel and other resources;

(1.3) have direct communication channels with the external and internal auditors;

(1.4) be able to obtain independent professional or other advice in furtherance of its duties; and

(1.5) be able to convene meetings with the external auditors, the internal auditors, or both, excluding the

attendance of the other Directors and employees, whenever deemed necessary.

2. The ARMC is not authorised to implement its recommendations on behalf of the Board but shall report its recommendations back to the Board for consideration and implementation.

3. Where the ARMC is of the view that a matter reported by it to the Board has been not satisfactorily resolved resulting in a breach of the Main Market Listing Requirements, the ARMC is authorised to promptly report such matter to BMSB.

Duties and Responsibilities

  1. To recommend the nomination and appointment of a person or persons as the external auditors, the audit fee and any questions of resignation or dismissal of the external auditors;
  1. To discuss with the external auditors before the audit commences, the nature and scope of audit, and any other matters as the external auditors may wish to discuss (without the presence of the management, if necessary);
  1. To act as an intermediary between the management or other employees, and the external auditors;
  1. To review with the external auditor the following before reporting the same to the Board:-a) the audit plan
  1. evaluation of the system of internal controls
  2. their Audit Report
  3. the assistance given by the employees of the Company
  4. the management letter and management response.
  1. To review the quarterly results and year-end financial statements before submission to the Board for approval, focusing particularly on:
  1. any  changes in accounting policies and practices;
  2. significant matters highlighted including financial reporting issues, significant judgments made by management, significant and unusual events or transactions, and how these matters are addressed;
  3. litigation that could affect results materially;
  4. the going concern assumption; and
  5. compliance with accounting standards in Malaysia and other legal requirements.

 

  1. In relation to the internal audit function:
  1. review the adequacy of the scope, function, competency and resources of the internal audit function, and that it has necessary authority to carry out its work;
  2. 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;
  3. review the appraisal or assessment of the performance of members of the internal audit  function;
  4. review the independence of internal audit function;
  5. approve any appointment or termination of senior staff members of the internal audit function; and
  6. being informed of any resignation of internal audit staff members and to provide the resigning staff member an opportunity to submit his/her reasons for resigning.

 

  1. To consider and report back to the Board any related party transaction and conflict of interest situation that may arise within the Group including any course of conduct that raises questions of management integrity.

 

  1. To consider the major findings of internal investigation and management response.

 

  1. To review and verify the allocation of share options given to the Group’s eligible employees is in accordance with the criteria for the employees share option scheme (“ESOS”) and the Main Market Listing Requirements of BMSB at the end of each financial year.

 

  1. To review and consider the appropriateness and adequacy of internal process for risk oversight and management. In particular, the ARMC shall:
  1. review the Enterprise Risk Profile/Register to ensure comprehensive and effective management key risks;
  2. review and recommend risk management strategies, policies and risk tolerance limits for Board’s approval;
  3. develop and implement adequate risk assessment, monitoring and management policies and procedures;
  4. ensure the risk management framework is embedded and consistently applied throughout the Group;
  5. review the appropriateness of management response to key risk areas and follow-up on management risk treatment action plans reported by the Risk Working Committee (“RWC”);
  6. provide regular reporting and timely update on the operations of the Enterprise Risk Management (“ERM”) framework to the Board; and
  7. receive regular reports on the risk profile, material risks (both financial and non-financial) faced by the Group and action plans taken by the management to mitigate the risks.

 

  1. In relation to major business investment proposals and/or feasibility:
  1. to review and evaluate the viability of the proposal/feasibility study prepared that all risks have been considered and are within the Group’s strategic goals; and that action plans or strategies to mitigate identified risks are adequate;
  2. to conduct meetings with the project sponsor(s) and Chief Executive Officer (“CEO”), if necessary, to discuss risk matters related to the proposal; and
  3. to make recommendation to the Board on the appropriate course of action to take.

 

  1. To oversee the Group’s internal compliance and control systems establish by the management, including reviewing the effectiveness of these systems and approving management’s programmes and policies to ensure effectiveness.

 

  1. To recommend the proposed provisions and/or writing off and impairment of asset in excess of RM1,000,000.00

 

  1. To recommend the disposal(s) of assets in excess of RM1,000,000.00

 

  1. Any other functions as directed by the Board.

 

Meeting and Minutes

 

  1. The ARMC shall meet at least four (4) times during a financial year, but additional meetings may be called at any time at the discretion of the Chairman. In order to form a quorum, the quorum for meeting shall be at least two (2) members where a majority of members present must be Independent Directors.
  2. The Executive Directors, Financial Officers and internal auditor and a representative of the external auditors shall normally attend the meetings but may be asked to leave a meeting as and when deemed necessary by the ARMC. Other persons may attend meetings only upon the invitation of the ARMC. However, at least twice a year the ARMC shall meet with the external auditors without the presence of executive board members and employees.
  3. The Company Secretary is the Secretary of the ARMC.
  4. 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 ARMC. The minutes shall be formally tabled to the Board for noting and action.

Website

The Board shall made available the ARMC written terms of reference on the website of the Company.

The Nomination Committee is a committee of the Board with the function of recommending appointments to the Board, Board Committees and personnel designated “Chief” and above and other strategic positions such as internal auditor, legal officer and risk officer.

Membership

  1. The Nomination Committee comprises a minimum of two (2) members, all of whom are Non-Executive Directors with the majority being Independent Directors.
  2. The term of office of each member of the Nomination Committee shall be one year and is subject to re-appointment thereafter at the discretion of the Board.
  1. The Board shall ensure that any vacancy in the Nomination Committee is filled within three (3) months of such vacancy arising.
  1. The appointment of a committee member automatically terminates when the member ceases to be a Director.

 

Meetings

The Nomination Committee shall meet at least once a year and may invite other Board members, officers of the Company, employees and any other external parties to attend meetings or part thereof as and when necessary.  Additional meetings shall be scheduled if considered necessary by the Committee members or Chairman.  Where necessary and appropriate, any decision of the Nomination Committee may be made by a majority of the members via a Circular Resolution.

 

The Nomination Committee through its Chairman shall report to the Board at the next Board of Directors’ Meeting after each meeting.  The Company Secretary is the Secretary to the Nomination Committee.

 

Quorum

Two (2) members of the Nomination Committee present in person or via video or tele- conference or other electronic means, enabling simultaneous visual or audio communication shall constitute a quorum for meeting of the Nomination Committee.

 

Voting

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 (except where 2 members form the quorum).

 

Functions

The Nomination Committee shall:-

  1. Develop, maintain and review criteria to be used in the recruitment process of new directors;
  1. Assess and recommend to the Board, the candidature of new directors (whether proposed by the Board, Senior Management, shareholders or third party referrals).

 

In making its recommendations, the Nominating Committee shall take into consideration the following criteria:

  • the candidate’s resume, curriculum vitae and qualification and time to effectively discharge his/her role as a Director of the Company;
  • character, integrity, competence, wisdom, ability to work as a team to support the Board, understanding of the business environment and in the case of candidates for the position of Independent Non-Executive Directors, the independence and ability to discharge such responsibilities as expected from the Independent Non-Executive Director;
  • whether the candidate has any conflict of interest with the Company;
  • any other relevant criteria as may be determined by the Nominating Committee from time to time.

 

  1. Develop criteria to assess the independence of the Independent Directors.
  1. To identify and recommend to the Board candidates suitable for appointment as directors of the Company, as members of Committees of the Board and personnel designated “Chief” and above and other strategic positions such as internal auditor, legal officer and risk officer.
  1. To annually review the performance of the Board, it’s Committees as well as the effectiveness of the Board and Board Committees, the required mix of skills, experience and other qualities of which the Board Members as well as the personnel designated “Chief” should bring to the Board.
  1. To review the succession plans for the Board’s and personnel designated “Chief” and training programmes for Directors.
  1. To assess and recommend the re-election/re-appointment of directors upon the expiry of their terms of appointment.
  1. To consider the balance of the Board and Board Committees membership and determine the core competencies and skills required of the Board in order to discharge its duties effectively.
  1. To introduce policy(ies) or guidelines which would enable the smooth administration and effective discharge of the Committee’s duties and responsibilities.