Salient Terms of Reference- Audit Committee


Objective
The principal objective of the Audit Committee ("the committee") is to assist the Board of Directors ("the Board") in discharging its statutory duties and responsibilities relating to accounting and reporting practices of Engtex Group Berhad ("the Company") and its subsidiaries ("the Group"). In addition, the Committee shall:-

a) Oversee and appraise the quality of the audits conducted by both the Company's internal and external auditors;
b) Maintain open lines of communication between the Board of Directors, the internal auditors and the external auditors for the exchange of view and information, as well as to confirm their respective authority and responsibilities; and
c) Determine the adequacy of the Group's administrative, operating and acounting controls

Composition
a) A majority of the Committee must be Independent Directors and all its members must be "Non Executive Directors' and;

b) At least one member of the 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 3 years working experience and:-

  • he must passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967,
  • he must be a member of one of the associations of accountants specified in Part I of the 1st Schedule of the Accountants Act, 1967.

   iii) fulfills such others requirements as prescribed by Bursa Malaysia Securities Berhad ("Bursa Securities")

Functions
The functions of the Committee are as follows:
a) The Committee shall review, appraise and report to the Board on:

  • the discussion with the external auditors, prior to the commencement of audit, the audit plan which states the nature and scope of the audit and to ensure co-ordination of audit where more than one audit firm is involved;
  • the review with the external auditors, his evaluation of the system of internal controls, his management letter and management's response
  • the discussion of problems and reservations arising from the external audits, the audits report and any matters the external auditors may wish to discuss;
  • the assistance given by the employees of the Group to the external and internal auditors; and
  • any related party transaction and conflict of interest situation that may arise within the Group or Company,
  • including any transaction, procedure or course of conduct that raises questions of management integrity.


b) To review where appropriate whether there is a reason to believe that the Group's external auditors is not suitable for re-appointment;

c) To consider any question of resignation or dismissal of the external auditors;

d) To review quarterly reporting and year end financial statements of the Group before submission to the Board, focusing particularly on:-

  • changes in or implementation of major accounting policy
  • significant adjustments arising from the audit
  • the going concern assumption
  • compliance with accounting standards and other legal requirements

e) To review the following in respect of internal audit function:-

  • adequacy of the scope, functions and resources of the Internal Audit Department and that it has the necessary authority to carry out its work
  • internal audit programmes
  • the major findings of internal audit investigations and management's responses, and ensure that appropriate actions are taken on the recommendations of the Internal Audit Department
  • appraisal or assessments of the performance of the senior staffs members of the Internal Audit Department; and
  • approval of any appointment or termination of senior staff members of the Internal Audit Department; and
  • resignation of senior internal audit staff member and provide the resigning staff member an opportunity to submit his/her reason for resignation.

f) To consider the major findings of internal investigations and management's response;

g) To recommend the nomination and appointment of external auditors as well as the audit fees;

h) To promptly report any matters resulting in the breach of the Bursa Securities Listing Requirements to the Board. Where the committee is of the opinion that such matter reported by it to the Board has not been satisfactorily resolved, the Committee shall promptly report such matter to Bursa Securities; and

i) any other function that may be mutually agree upon by the Committee and the Board, which would be beneficial to the Company and ensure the effective discharge of the Committee's duties and responsibilities.