Terms of Reference of Audit and Risk Management Committee Print E-mail
Investor Relations - Corporate Governance
doc_logo

GLOBETRONICS TECHNOLOGY BERHAD


(Company No: 410285-W)
(Incorporated in Malaysia)

 

TERMS OF REFERENCE OF AUDIT AND

RISK MANAGEMENT COMMITTEE

TERMS OF REFERENCE OF AUDIT AND RISK MANAGEMENT COMMITTEE

1. Objectives

The primary objective of the Audit and Risk Management Committee (ARMC) is to assist the Board in fulfilling its oversight responsibilities relating to corporate accounting, system of internal controls and risk management processes, management and financial reporting practices of the Group.

2. Composition

(a) The ARMC Members shall consist of at least three (3) members appointed by the Board of Directors from amongst the Directors of whom all the members of the ARMC are Non-Executive Directors with a majority of them being independent directors.

(b) At least one (1) member of the ARMC:

(i) must be a member of the Malaysian Institute of Accountants (“MIA”);

(ii) if he/she is not a member of the MIA, he/she must have at least three (3) years’ working experience; and
  • he/she must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or
  • he/ she must be a member of one of the Association of Accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or
(iii) must have at least 3 years’ post-qualification experience in accounting or finance with either one of the following qualifications:
  • a degree/masters/doctorate in accounting or finance; or
  • a member of any professional accountancy organisation which has been admitted as a full member of the International Federation of Accountants; or

(iv) must have at least 7 years’ experience as a chief financial officer of a corporation or be primarily responsible for the management of the financial affairs of a corporation; or

(v) fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad.

(c) No alternate Director shall be appointed as a member of the ARMC.

(d) The Members of the ARMC shall elect a chairman from among their members who shall be an independent director.

(e) The Board of Directors via its Normination Commitee review the term of office and performance of the Audit and Risk Management Committee and each of its members annually.

(f) If a member of the Audit and Risk Management Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced to below three (3), the Board of Directors shall, within three (3) months of the event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

2. Meetings and Quorum

(a) The ARMC will hold a minimum of four (4) meetings a year, although additional meetings may be called at any time at the ARMC Chairman’s discretion or if requested by any ARMC member, the management, and the internal or external auditors.

(b) The ARMC members shall meet with the external auditors at least twice a year, without any executive Board members or officers present.

(c) The Executive Chairman, Chief Financial Officer, Internal Auditor and a representative of the external auditors (if required) may attend ARMC meetings. The senior management team may attend meetings upon the invitation of the ARMC to provide detailed explanation and clarification on matters that have been tabled.

(d) The quorum for each meeting shall be at least two thirds (2/3) of the members with independent directors forming the majority.

(e) Minutes of each meeting will be circulated to each member of the ARMC and the ARMC Chairman shall report on each meeting to the Board.

3. Authority

The ARMC shall, at the Company’s expense:

(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 records, information, property and personnel of the Company;

(d) Have direct communication channels with the external and internal auditors;

(e) Be able to obtain independent professional or other advice; and

(f) Be able to convene meetings with the external auditors, excluding the attendance of the executive Board members or officers, where deemed necessary.

4. Duties and Responsibilities

(i) Financial Procedures and Financial Reporting

  • Review the following Group financial statements and make recommendations to the Board for approval of the same.
  • The review of the unaudited quarterly financial results is to ensure the disclosures are in compliance with the Financial Reporting Standard 134 – Interim Financial Reporting and applicable disclosure provisions in the Main LR.

(ii) Internal Audit

  • Review and approve the internal audit plan.
  • Review and report the adequacy of the scope, functions and resources of the internal audit function and that it had the necessary authority to carry out its duties;
  • Review the results of the Group’s internal audit procedures and the adequacy of actions taken by the management based on the reports; and
  • Review any appraisal or assessment of the performance of members of the internal audit function and approve any appointment or termination of the internal audit staff.

(iii) External Audit

  • To review with the external auditors, the audit plan, scope of the audit and the areas of audit of the Company/ Group;
  • To review with the external auditors, their evaluation of the system of internal controls and audit findings;
  • To discuss problems and reservations arising from the audit, and any other matters the auditors may wish to discuss;
  • To review the auditors’ report with the external auditors;
  • To review and reported the assistance given by the Company’s/ Group’s Officers to the external auditors and the overall conduct of the audit;
  • To assess the independence of the external auditors
  • To review non-audit fees and obtain written assurance from external auditors stating their independence in the audit
  • To review the suitability of the external auditors for recommendation to the Board for re-appointment and the audit fee thereof; and

(iv) Financial Reporting

  • To review the annual audited financial statements of the Company/ Group and quarterly results of the Group, and thereafter submit them to the Board for approval, focusing particularly on:
- Any changes in accounting policies and practices;
- Significant adjustments arising from the audit;
- The going concern assumption;
- Significant and unusual events; and
- Compliance with accounting standards and other legal requirements.
  • To ensure publication of annual audited financial statements.

(v) Risk management

  • To review the adequacy and effectiveness of risk management and internal control systems instituted within the Group.

(vi) Related Party Transactions

  • To review the related party transactions that had arisen within the Company or the Group and the disclosure of such transactions in the Annual Report

(vii) Other Functions

  • To review the Audit and Risk Management Committee Report, Statement on Risk Management and Internal Control and Statement on Corporate Governance Statement before submitting for Board’s approval and inclusion in the Annual Report.