TERMS OF REFERENCE OF AUDIT COMMITTEE
The purpose of Audit Committee (AC) is to assist the Board of Directors (Board or Directors) in fulfilling its corporate governance responsibilities through the oversight of the financial statements and financial reporting process, the management of risk and system of internal controls, the governance processes and the audit process of IGB and its subsidiaries (Group) as well as the Groupís process for monitoring compliance with laws and regulatory requirements.
COMPOSITION AND APPOINTMENT
(a) AC shall be members of, and appointed by, the Board and shall consist of not less than 3 members, all of whom must be Non-Executive Directors, with a majority of them, including the chairman, must be independent. No alternate Director shall be appointed as a member of AC.
(b) Members of AC may relinquish their membership with prior written notice to IGB and may continue to serve as Director of IGB. In the event of any vacancy in AC, IGB must fill the vacancy within 3 months to ensure compliance with the Bursa Malaysia Securities Berhad’s (Bursa Securities) Main Market Listing Requirements (MMLR).
(c) All members of AC should be financially literate and must be able to read, analyse, interpret and understand financial statements. At least 1 member of AC must be a member of the Malaysian Institute of Accountants or shall fulfil such other requirements as prescribed in MMLR.
(d) The composition of AC, including members’ tenure, performance and effectiveness as well as their accountability and responsibilities, shall be assessed via the annual Board Committee Assessment.
AC shall, within the limits of the policy determined and powers delegated by the Board, has the authority to investigate any matter within its terms of reference, full access to and co-operation by management and full discretion to invite any Director or executive officer to attend its meetings, and reasonable resources (including access to external consultants) to enable it to discharge its functions properly.
AC shall meet at least 4 times a year and its quorum must at all times be comprised at least 2 Independent Directors. Additional meetings may be held upon request by any AC member, internal or external auditors. AC shall meet with external auditors (EA) at least twice a year, or more frequently if necessary, and shall hold two private sessions with external auditors without the presence of management.
Minutes shall be kept of the proceedings and the resolutions of AC. AC chairman shall report to the Board on any salient matters noted by AC and which requires the Board’s notice, direction and approval. Minutes of each AC meeting shall be tabled at the Board meeting for the Directors’ review and notation.
1. Overseeing the financial reporting of the Group to ensure that they presents a true and fair view of the Group’s financial position and performance and comply with applicable financial reporting standards and regulatory requirements. Group Managing Director and Chief Financial Officer shall state in writing to the Board in each financial year that, in their opinion, the Group’s financial records have been properly maintained and that the financial statements comply with the applicable financial reporting standards as well as disclosure provisions of MMLR and present a true and fair view of the Group’s financial position and performance.
2. Assessing the adequacy and effectiveness of the Group’s risk management, internal control and governance systems and ensuring that the risk management and internal control framework is in place to improve communication of the identified risks with management measure the impact of the identified risks and facilitate implementation of coordinated mitigating measures.
3. Assessing the control environment of the Group including financial, operational, compliance and management information system which includes ensuring the implementation of policies and adequacy of controls in place, including systems for compliance with applicable laws, rules, directives and guidelines. AC shall review the adequacy, integrity and reliability of the Group’s control environment on an annual basis.
4. Reviewing audit plans of EA, and reports of EA in connection with the preparation of the annual consolidated financial statements of IGB.
5. Reviewing and recommending audit fee and any questions of resignation, dismissal or reappointment of EA including terms of engagement. AC shall review the independence, objectivity and effectiveness of EA, including non-audit services and related fees, on an annual basis.
6. Reviewing and approving Group Internal Audit (GIA) charter which defines the independent purpose, authority, scope and responsibility of GIA functions, GIA plan of work programme and results of GIA processes including recommendations and actions taken; assessing the scope, functions, competence and resources of GIA function; and ensuring independence and impartiality of GIA. AC shall review the effectiveness of GIA function on an annual basis, including the adequacy of audit resources.
7. Reviewing and recommending for the Board’s approval, the extent of IGB’s compliance with the requirements of MMLR on the appropriate materials and disclosures to be included in Audit Committee Report and Statement on Risk Management and Internal Control of IGB’s annual report.
8. Reviewing conflict-of-interest situations and related party transaction (RPT) proposed to be entered into by the Group, including recurrent RPT (RRPT) pursuant to shareholder mandate, and monitoring the procedures established to regulate RPT and RRPT, including ensuring compliance with provisions of MMLR.
9. Verifying the allocation of share options pursuant to Executives Share Option Scheme (ESOS) as compliant with the criteria set out in ESOS By-Laws at the end of each financial year.
10. Ensuring the availability of a whistle-blowing avenue for concerns about possible improprieties in matters of financial reporting, financial control or other business and commercial related matters to be raised and independently investigated, and for appropriate follow up action to be taken.
11. Undertaking special investigations requested by the Board, reviewing any significant transactions which are not within the normal course of business of the Group.
12. Reporting breaches and non-compliance of MMLR to Bursa Securities if such matters are not satisfactorily resolved by the Board.