Pesona Metro Berhad | Construction, Polyurethane Products, Modular Panels, Developer
  • Term of Reference of The Audit Committee

    1. Membership

    (a) The Audit Committee shall be appointed by the Board of Directors (“the Board”) from amongst the Directors of the Company and shall consist of not less than three (3) members.
    (b) All members of the Audit Committee must be Non-Executive Directors, with a majority of them being Independent Directors. The appointment of an Audit Committee member terminates when he/she ceases to be a Director of the Company.
    (c) All members of the Audit Committee should be financially literate and are able to understand matters under the purview of the Audit Committee including the financial reporting process.

    (d) At least one (1) member of the Audit Committee:

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

    (e) The Chairman of the Audit Committee shall be an Independent Director appointed by the Board. The Chairman of the Audit Committee shall not the Chairman of the Board.
    (f) No alternate director shall be appointed as a member of the Audit Committee
    (g) No former key audit partner shall be appointed as a member of the Audit Committee before observing a cooling-off period of at least two (2) years.
    (h) In the event of any vacancy in the Audit Committee resulting in the non-compliance with paragraphs 15.09(1) and 15.10 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board must fill the vacancy within three (3) months.
    (i) The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Nomination Committee annually to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference. To facilitate the review, the Audit Committee shall submit an Evaluation Form to the Nomination Committee for assessment.

    2. Meetings and Administrative Matters

    (a) The Audit Committee shall meet at least four (4) times a year. Additional meetings may be held as decided by the Chairman or upon the request of the External Auditor to consider any matters that the External Auditor believe should be brought to the attention of the Directors and/or shareholders.
    (b) The Audit Committee meeting may be held at two (2) or more venues within or outside Malaysia using any technology that enables the Audit Committee members to participate for the entire duration of the meeting, and that all information and documents for the meeting must be made available to all members prior to or at the meeting.
    (c) The quorum for each Audit Committee meeting shall be at least two (2) members, the majority of whom must be Independent Directors. 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 Director to chair that meeting.
    (d) Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes, the chairman of the meeting shall have a second or casting vote PROVIDED THAT where two (2) members form a quorum, the chairman of the meeting at which only such a quorum is present, or at which only two members are competent to vote on the question at issue, shall not have a casting vote.
    (e) The Audit Committee may extend an invitation to the External Auditor, Internal Auditor, other board members, Management or employees to attend the Audit Committee meetings as it deems necessary.
    (f) The Audit Committee shall meet the External Auditor and Internal Auditor meet at least twice a year without the presence of the Executive Directors and Management.
    (g) The Company Secretary or such substitute as appointed by the Board or the Audit Committee from time to time shall be the Secretary of the Audit Committee. The Secretary shall be entrusted to record all proceedings and minutes of all meetings of the Audit Committee.
    (h) The Chairman of the Audit Committee shall report to the Board on its proceedings after each meeting on matters within its duties and responsibilities. The Audit Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
    (i) In the event the Audit Committee require matters to be approved by way of a written resolution, a resolution in writing signed or approved by letter or telefax or other electronic means by all members of the Audit Committee, shall be as valid and effectual as if it had been passed at a meeting of the Audit Committee duly called and constituted. Any such resolution may be executed in any number of counterparts, each signed by one or more members of the Audit Committee all of which taken together and when delivered to the Secretary shall constitute one and the same resolution.
    (j) The notice of the Audit Committee meetings and meeting materials shall be circulated at least five (5) business days before each meeting to members of the Audit Committee. 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 Audit Committee member either personally or by fax or e-mail, fax, or by post or by courier to his/her registered address as appearing in the Register of Directors or to the address provided by the Audit Committee member, as the case may be.
    (k) The Company shall cause minutes of all proceedings of the Audit Committee meetings to be entered in books kept for that purpose. Minutes of each meeting signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting shall be evidence of the proceedings to which it relates. The books containing the minutes of proceedings of the Audit Committee meetings shall be kept by the Company at the Registered Office or any other place as may be determined by the Board and shall be open to the inspection of any member of the Board.

    3. Rights and Authority

    The Audit Committee shall, in accordance with the procedures determined by the Board and at the cost of the Company:-
    (a) have the right 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 and the Group;
    (d) have direct communication channels with the External Auditor, Internal Auditor or person(s) carrying out the internal audit function or activity;
    (e) be able to obtain independent professional or other advice;
    (f) be able to convene meetings with the External Auditor, Internal Auditor or the person(s) carrying out the internal audit function or activity or both, excluding the attendance of other Directors and employees of the Company, whenever deemed necessary.

    4. Duties and Respondsibilities

    The Audit Committee shall undertake the following duties and responsibilities:-
    (a) Financial reporting

    To review the quarterly results and year-end financial statements, before the approval by the Board, focusing particularly on -
    • changes in or implementation of major accounting policy changes;
    • significant matters highlighted including financial reporting issues, significant judgments made by management, significant and unusual events or transactions, and how these matters are addressed; and
    • compliance with accounting standards and other legal requirements;
    (b) Internal controls

    (i) To monitor and review on the effectiveness of the Group's internal financial controls and the timeliness of, and reports on, the effectiveness of corrective or remedial actions taken by Management;
    (ii) To review and approve the statements to be included in the Annual Report concerning internal controls and risk management.

    (c) External audit

    (i) To review the annual audit plan presented by the External Auditor;
    (ii) To review the evaluation of the systems of internal control by the External Auditor;
    (iii) To review the External Auditor's report and the findings of the audit with the External Auditor;
    (iv) To review any management letter issued by the External Auditor to the Company and Management's response to such letter;
    (v) To consider and make recommendations to the Board in relation to the nomination, appointment, re-appointment, resignation or removal of the External Auditor, including the review of any letter of resignation from the External Auditor and whether there is reason (supported by grounds) to believe that the External Auditor is not suitable for re-appointment;
    (vi) To establish policies and procedures to assess the suitability and independence of External Auditor and to review and monitor their suitability and independence;
    (vii) To review the performance of the External Auditor on an annual basis;
    (viii) To establish policies and procedures in governing circumstances for contracts of non-audit services to be entered with the External Auditor;
    (ix) To obtain written assurance from the External Auditor confirming their independence throughout the conduct of the audit engagement in accordance with relevant professional and regulatory requirements;
    (x) To review the assistance and co-operation given by the Company's officers and Management to the External Auditor.

    (d) Internal audit

    (i) To decide on the appointment and removal of the Internal Auditor and review the budget for the internal audit function;
    (ii) To review the adequacy of the scope, competency and resources of the internal audit function and that it has the necessary authority to carry out its work. The Audit Committee should satisfy itself that-
    - the person responsible for internal audit has relevant experience, sufficient standing and authority to enable him/her to discharge his/her functions effectively;
    - internal audit has sufficient resources and is able to access information to enable it to carry out its role effectively; and
    - the personnel assigned to undertake internal audit have the necessary competency, experience and resources to carry out the function effectively;
    (iii) To review the internal audit plan, processes, the results of the internal audit assessments, investigation undertaken and whether or not appropriate action is taken on the recommendations;
    (iv) To assess the performance of the Internal Auditor;
    (v) To review any letter of resignation from Internal Auditor and provide the Internal Auditor an opportunity to submit reasons for resigning;
    (vi) To review the assistance and co-operation given by the Company's officers and Management to the Internal Auditor;

    (e) Related party transaction and conflict of interests

    To review any related party transaction and conflict of interest situation that may arise within the Company or Group including transaction, procedure or course of conduct that raises questions of management integrity.

    (f) Others

    (i) To report to Bursa Securities on any matter reported by it to the Board of the Company which has not been satisfactorily resolved resulting in a breach of the Main Market Listing Requirements of Bursa Securities;
    (ii) To carry out any other functions that may be directed by the Board from time to time.


    The Audit Committee shall review its Terms of Reference periodically and may recommend to the Board, any changes it deems necessary.

    The Terms of Reference of the Audit Committee was last reviewed by the Board on 27 February 2018.