SOLUTION GROUP BERHAD
Audit and Risk Management Committee
Terms of Reference
The Audit Committee of the Company was established on 17 June 2005 and had on 3 April 2019 renamed as the Audit and Risk Management Committee with the additional responsibility for the risk management fuctions of the Group.
MEMBERS OF THE AUDIT AND RISK MANAGEMENT COMMITTEE
Members of the Audit and Risk Management Committee are as follows:
Faizal Sham Bin Abu Mansor (Chairman)
Independent Non-Executive Director
Datuk Dr. Syed Muhamad bin Syed Abdul Kadir
Independent Non-Executive Director
Yvonne Low Win Kum
Independent Non-Executive Director
TERMS OF REFERENCE
Composition of Audit and Risk Management Committee
The Audit and Risk Management Committee shall be appointed by the Board from amongst the Board of Directors who are non-executive directors and shall comprise at least three (3) members, a majority of whom shall be Independent Directors. No alternate director shall be appointed as a member of the Audit and Risk Management Committee. No former audit partner of SOLUTN’s external auditors shall be appointed to the Audit and Risk Management Committee unless that person has observed a cooling-off period of at least three (3) years.
At least one (1) member of the Audit and Risk Management Committee must be a member of the Malaysian Institute of Accountants (“MIA”) or if he/she is not a member of the MIA, he/she must have at least 3 years’ working experience and;
(a) He/she must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or
(b) He/she must be a member of one of the associations of accountants as specified in Part II of the 1st Schedule of the Accountants Act 1967; or
fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad.
The term of office and performance of the Committee and each of its members shall be reviewed by the Board. In the event of any vacancy with the result that the number of members is reduced to below three, the vacancy must be filled within three (3) months.
The Chairman of the Audit Committee shall be appointed by the Board, or failing which, by the members of the Audit Committee themselves. The Chairman shall be an Independent Director.
In the event of the Chairman’s absence, the meeting shall be chaired by another Independent Director.
The Company’s Secretary shall be the secretary of the Audit and Risk Management Committee and shall be responsible for drawing up agendas in consultation with the Chairman and circulating to the committee members prior to each meeting.
The Company Secretary shall also be responsible for recording attendance, keeping minutes of meetings and circulating to committee members and members of the Board.
Frequency of Meetings
The quorum for a meeting shall be two (2) members, provided that the majority of the members present at the meeting shall be Independent Directors.
The Committee shall meet at least four (4) times a year to coincide with the review of the quarterly and annual financial statement prior to presentation to the Board for approval. However, additional meetings may be called as and when required with reasonable notice as the Committee Members deem fit.
The Committee may invite the internal and external auditors, any other Board members and senior management of the Group to be in attendance during meetings to assist in its deliberations.
Rights and Authority
The Audit and Risk Management Committee shall:
- have explicit authority to investigate any matter within its terms of reference;
- have the resources which are required to perform its duties;
- have full and unrestricted access to all information, document and employees of the Group;
- have direct communication channels with the Internal and External Auditors;
- be able to obtain independent legal or independent professional advice in the performance of its duties at the cost of the Company;
- have authorisation to convene meetings with the Internal and External Auditors, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.
Duties and Responsibilities of the Audit and Risk Management Committee
In fulfilling its primary objectives, the Committee shall undertake the following duties and responsibilities:
- To review the appointment of External Auditors, the audit, resignation or dismissal and to make recommendations to the Board;
- To review the audit plan, the nature and scope of audit with the External Auditors before the audit commences;
- To review the proposed audit fees for the External Auditors in respect of their audit of the Group;
- To review any management letters sent by the External Auditors to the Company and the Management’s response to such letters;
- To review the Company’s policies and procedures with the Management and External Auditors to ensure the adequacy accounting and financial reporting controls;
- To review the audit findings raised by the External Auditors and ensure that issues are being managed and rectified appropriately and timely manner;
- To review the assistance given by the officers and employees of the Group to the External Auditors;
- To have direct communication channels with the External Auditors and to meet with the External Auditors without the presence of Management, at least twice a year; and
- To discuss issues arising from the interim and final audit and any matter the External Auditors may wish to discuss (in the absence of Management where necessary).
- To review the effectiveness of the internal audit function; and
- To review the internal audit program and results of the internal audit process.
- To review the adequacy of risk management framework and to provide assurance to the Board of Directors on the effectiveness of the Company’s risk management processes; and
- To review and evaluate the quality and effectiveness of the internal control and management information systems.
- To review quarterly reports on consolidated results and annual financial statements prior to submission to the Board of Directors focusing particularly on going concern assumption, compliance with accounting standards and regulatory requirements, any changes in accounting policies and practices, significant issues arising from the audit and major judgemental areas; and
- To monitor related party transactions entered into by the Company or the Group and to determine if such transactions are undertaken on an arm’s length basis and normal commercial terms and on terms not more favourable to the related parties than those generally available to the public and to review conflicts of interest that may arise within the Company or the Group including any transaction, procedures or course of conduct that raises questions of Management’s integrity.
- To assist the Board in identifying, reviewing and assessing the principal risks in the achievement of SOLUTN’s objectives and overseeing the implementation of appropriate systems/processes to manage or mitigate these risks.
- To review and approve the annual risk management plan and ensure the adequacy of coverage.
- To review the adequacy and effectiveness of SOLUTN’s enterprise risk management framework, risk management process, risk profile and risk appetite to ensure they are relevant and consistent with SOLUTN Group’s business strategy and level of operations in safeguarding the Group’s assets and profitability.
- To review the effectiveness of internal control systems deployed by Management to address key risks faced by SOLUTN Group.
- To review the recommendation of corrective measures undertaken to mitigate such risks/weaknesses and the status of implementation of action plans.
- To provide guidance on the overall risk management strategy and directives for implementation to ensure that the principles and requirements of managing risks are consistently adopted throughout SOLUTN Group.