Audit Committee – Term of Reference | Seremban Engineering Berhad

Seremban Engineering Berhad

Audit Committee – Term of Reference

1. Objective

The principal objectives of the Audit Committee (“AC”) of Seremban Enginnering Berhad (“Company”) are to assist the Board of Directors (“Board”) in discharging its statutory and fiduciary duties and responsibilities relating to accounting and reporting practices of the Company and its subsidiaries (“Group”). In addition, the AC shall:

a)	In complying with specified accounting standards and required disclosure as administered by Bursa Malaysia Securities Berhad (“Bursa”), relevant accounting standards bodies, and any other laws and regulations as amended from time to time to ensure that the Company’s financial statements are a reliable source of information.
b)	In presenting a balanced and understandable assessment of the Company’s position and prospects.
c)	In establishing a formal and transparent arrangement for maintaining an appropriate relationship with the Company’s external and internal auditors; and
d)	In maintaining a sound system of internal controls and risk management to safeguard shareholders’ investment and the Company’s assets.

2. Composition

a)	The AC members shall be appointed by the Board from amongst the Directors excluding Alternate Directors; and shall consist of not less than 3 members. All the members of the Committee must be non-executive directors, with a majority of them being independent directors.
b)	All the members of the Committee should be financially literate and at least one member should be a member of an accounting association or body.
c)	The Chairman shall be elected by the Committee from among their members who shall be an independent non-executive director. The Chairman should engage on a continuous basis with senior management, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Company.
d)	A cooling-off period of at least two (2) years shall be observed by a former key audit partner being appointed as a member of the Committee.
e)	In the event that a member of the Committee vacates the office resulting in the total number of members to reduce to below three (3), the Board shall, within three (3) months of that event, appoint a new member to make up the minimum number to three (3) members

3. Secretary(ies)

a)	The Secretary(ies) of the AC shall be the Company Secretary(ies) of the Company.
b)	The Secretary(ies) shall be responsible for drawing up the agenda and circulating it prior to each meeting and keeping the minutes of AC meetings.

4. Authority

The Committee shall:

a)	have authority to investigate any matter within its terms of reference;
b)	have the resources which are required to perform its duties;
c)	have full and unrestricted access to any information pertaining to the Company;
d)	have direct communication channels with the external and internal auditors; where applicable and to the senior management of the Group;
e)	be able to obtain independent professional or other advice; and
f)	be able to convene meetings with the external auditors, the internal auditors or both excluding the attendance of other directors and employees, whenever deemed necessary.

5. Duties and Responsibilities

The Committee shall:

review the quarterly results and year ended financial statements, prior to the approval by the Board;

consider and recommend the appointment of the external auditors, the audit fees and any question of resignation or dismissal of external auditors;

establish, review and approve a policy on non-audit services which may be provided by the external auditors and/or their affiliates (refers to corporations or firms in which the external auditors have financial interest and/or business collaboration by virtue of their international branding), including the conditions and procedures which must be adhered to by the external auditors and/or their affiliates in the provision of such services;

convene meetings with the external auditors, the internal auditors or both without the attendance of other directors and employees of the Group, whenever deemed necessary;

do the following in relation to the internal audit function:

i.	review the adequacy of the scope, function, competency and resources of the internal audit function, and that it has the necessary authority to carry out its works;
ii.	review the internal audit results and where necessary; to ensure that appropriate action is taken on the recommendations of the internal audit function; and
iii.	review the appointment or re-appointment of the internal auditors, the audit fee and questions of resignation or dismissal.

review the related parties transactions and conflicts of interest situations that may arise within the Company or the Group including transactions, procedures or course of conduct that raises a question of management integrity;

review the application of corporate governance principles and the extent of the Group’s compliance with the best practices set out under the Code, directions and guidelines established by the relevant regulatory bodies;

consider the effectiveness of the internal control system and risk management framework adopted within the Group and to be satisfied that the methodology employed allows identification, analysis, assessment, monitoring and communication of risks in a regular and timely manner that will allow the Group to mitigate losses and maximise opportunities;

monitor the establishment and maintenance of a process, including controls, policies and procedures, for the systematic identification, assessment, prioritisation, management, monitoring and reporting of the Group’s material economic, environmental and social risks and opportunities;

maintain and keep under review the whistle-blowing mechanism of the Company which shall be in accordance with Whistle-blowing Policy & Procedures, which aims to provide protection and confidentiality;

review the contents and executions of the Anti-Bribery and Anti-Corruption reported information at regular intervals and order a regular review (at least once every 3 years) of the Anti-Bribery and Anti-Corruption Policy to ensure it is up to date;

ensure the Management has adequate and appropriate resources needed for the effective operations of the Anti-Bribery and Anti-Corruption Management System are allocated to fulfill and comply with the Anti-Bribery and Anti-Corruption Policy;

review the AC Report, statement on Internal Audit Function and Statement on Risk Management and Internal Control for inclusion in the Annual Report;

identify and direct any special project or investigate and to report on any issue or concern in regard to the Management of the Group; and

consider other topics as defined by the Board.

6. Procedure of Meetings

6.1. Frequency of meetings

Meetings shall be conducted no less than four (4) times annually. In order to form quorum for the meeting, the majority of the members present must be Independent Directors. Other meetings may be held as and when required. However, the Committee should meet with the external auditors without the presence of the executive directors, at least twice a year.

6.2. Quorum

In order to form quorum for the meeting, majority of members present must be independent directors.

6.3 Notice of Meetings

Reasonable notice of AC meetings shall be given in writing sent through the post, facsimile, electronic mail and by any means of telecommunication in permanent written form to all the AC members, except in the case of emergency, where the AC may waive such requirement.

6.4 Attendance of Other Directors, Employees and External Parties

The AC may invite other Directors and employees, including external parties such as the external auditors, outsources internal audit function (if appointed) and other consultants to attend any AC meeting to brief the AC on issues that are set out in the meeting agenda.

6.5 Voting and Proceedings of Meetings

The AC members may participate in a meeting by way of telephone and video conferencing or by means of other communications equipment whereby all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting and shall be entitled to vote or be counted in a quorum accordingly.

Questions arising at any meeting of the AC shall be decided by a majority of votes of the members present, and in the case of equality of votes, the Chairman of the AC shall have a second or casting vote. The AC member shall abstain from deliberations and voting in respect of any matter which may give rise to an actual or perceived conflict of interest situation.

6.6 Circular Resolution

A resolution in writing signed by a majority of the AC members for the time being shall be as valid and effectual as if it had been passed at a meeting of the AC duly called and constituted. Any such resolution may consist of several documents in like form, each signed by one (1) or more AC members. Any such document may be accepted as sufficiently signed by an AC member if transmitted to the Company by telex, telegram, cable, facsimile or other electrical or digital written message to include a signature of an AC member.

6.7 Minutes of Meetings

Minutes of the AC meeting shall be circulated promptly to all members of the AC and once agreed, to all members of the Board for their notation. The Secretary(ies) shall keep record of all conclusions and resolutions passed at all meetings of the AC, including the names and signatures of the attendees.

The Minutes of the AC meetings 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 if so signed, shall be conclusive evidence of the proceedings of the meeting duly held.

Full minutes of the AC meetings shall be kept by the Secretary(ies) at the registered office.

7. Review and Amendment

a)	The Committee shall review this Terms of Reference (“ToR”) periodically to ensure it is operating in line with the latest best practices recommended by the Malaysian Code on Corporate Governance.
b)	Any revision or amendment to this ToR as proposed by the AC shall first be presented to Board for review and its approval.
c)	This ToR shall be made available on corporate website.

Updated as at 24 October 2024

Audit Committee – Term of Reference

CONTACT US

FOLLOW US ON