Audit Committee

Terms Of Reference
1.1 The Audit Committee shall be appointed by the Board of Directors from amongst the Directors of the Company and shall consist of not less than (3) members, all of whom shall be Non-Executive Directors, and the majority shall be Independent Directors.
1.2 The majority of the members including the Chairman of the Audit Committee shall be Independent Directors as defined in Chapter 1 of the Listing Requirements.
1.3 All members of the Audit Committee should be financially literate and at least one member of the Audit Committee:
1.3.1 must be a member of the Malaysian Institute of Accountants; or
1.3.2 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 examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or he must be a member of one of the Associations specified in Part II of the 1st Schedule of the Accountants Acts, 1967; or
1.3.3 must have at least 3 years’ post-qualification experience in accounting or finance and 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;
1.3.4 Have at least 7 years’ experience being a chief financial officer of a corporation or having the function of being primarily responsible for the management of the financial affairs of a corporation; or
1.3.5 Fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).
1.4 No Alternate Director shall be appointed as a member of the Audit Committee.
1.5 The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an independent director.
1.6 If a member of the Audit Committee (including the Chairman) resigns, dies or for any reason ceases to be a member with the result that the number of the members is reduced to below three (3), the Board shall, within three (3) months appoint such number of new members as may be required to make up the minimum of three (3) members.
1.7 The terms of office and performance of the Audit Committee and each of its members shall be reviewed by the Board annually. However, the appointment terminates when a member ceases to be a Director.

2.1 The quorum of an Audit Committee Meeting shall be at least two (2) members, who are both Independent Directors.
2.2 Meeting of the Audit Committee shall be held at least four (4) times in each financial year. The Chairman may request for additional meetings if he considers that is necessary.
2.3 Notwithstanding paragraph 2.2 above, upon request of any member of the Audit Committee, non-member directors, internal or external auditors, the Chairman shall convene a meeting of the Audit Committee to consider the matters brought to his attention.
2.4 The external auditors have the right to appear and be heard at any meeting of the Audit Committee and shall appear before the Committee when required to do so.
2.5 The non-member directors and employees of the Company and of the Group shall normally attend the meetings to assist in deliberations and resolutions of matters raised.
2.6 The internal auditors shall be in attendance when required at the meetings to present and discuss the audit reports and other related matters as well as the recommendations relating thereto and to follow-up on all relevant decisions made.
2.7 The Company Secretary or his/her representative or other appropriate senior officer shall act as Secretary of the Audit Committee and shall be responsible, with the concurrence of the Chairman, for drawing up and circulating the agenda and the notice of meetings together with the supporting explanatory documentation to committee members prior to each meeting.
2.8 The Company Secretary or his/her representative or other appropriate senior officer shall also be in attendance at each Audit Committee meetings and be responsible for keeping the minutes of meetings of the Audit Committee, and circulating them to committee members and to the other members of the Board of Directors.
2.9 In addition to the availability of detailed minutes of the Audit Committee Meetings to all Board members, the Audit Committee at each Board meeting will report a summary of significant matters and resolutions.
2.10 The Audit Committee may invite the Group Managing Director and other appropriate officer(s) to attend the Audit Committee, where their presence are considered appropriate as determined by the Chairman of the Audit Committee.
2.11 The Audit Committee may deal with matters by way of circular reports and resolutions in lieu of convening a formal meeting. A resolution in writing signed by all members in lieu of convening a formal meeting shall be as valid and effectual as it had been passed at a meeting of the Audit Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more members

The Audit Committee is authorised by the Board (whenever necessary and reasonable for the Company) to perform its duties, in accordance with a procedure to be determined by the Board of Directors, and at the cost of the Company to:
3.1 Have authority to investigate any matter within its terms of reference;
3.2 have adequate resources which are required to perform its duties;
3.3 have full and unrestricted access to information, records and documents pertaining to the Company;
3.4 have direct communication channels with external auditors and person(s) carrying out the internal audit function or activity (if any);
3.5 engage, consult and obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise it considers necessary; and
3.6 be able to convene meetings with external auditors, the persons carrying out the internal audit function or both, excluding the attendance of executive Directors and employees of the Company, whenever deemed necessary.

The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as the chairman, the managing director, the head of finance, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Company.

The Audit Committee shall, amongst others, discharge the following functions:
4.1 To review and recommend for the Board’s approval, the Internal Audit Charter which defines the independent purpose, authority, scope and responsibility of the internal audit function in the Company and the Group.
4.2 To review the following and report to the Board:
4.2.1 With the external auditors : the audit plan, audit report and the extent of assistance rendered by the Group’s employees during the audit; the evaluation of the system of internal controls; to nominate and recommend the appointment/ re-appointment and independence of the external auditors, audit fee and any questions of resignation or dismissal of the external auditors and to review the letter of resignation from the external auditors, if applicable, and report the same to the Board. In considering the appointment/ re-appointment of the external auditors, to consider among others:-
i)the adequacy of the experiences and resources of the accounting firm;
ii)the persons assigned to the audit;
iii)the accounting firm’s audit engagements;
iv)the size and complexity of the listed issuer’s group being audited; and
v)the number and experience of supervisory and professional staff assigned to the particular audit; to consider the performance of the external auditor and its independence as below;
i)the external auditor’s ability to meet deadlines in providing services and responding to issues in a timely manner as contemplated in the external audit plan;
ii)the nature of the non-audit services provided by the external auditor and fees paid for such services relative to the audit fee; and
iii)whether there are safeguards in place to ensure that there is no threat to the objectivity and independence of the audit arising from the provision of non-audit services or tenure of the external auditor. before the audit commences, to discuss the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved in the audit; the management letter and the management’s response; and issues and reservations arising from audit.
4.2.2 With the internal auditors: ensure the internal audit function is independent of the activities it audits and the head of internal audit reports directly to the Audit Committee. The head of internal audit should be suitably qualified and be responsible for providing assurance to the Audit Committee that the internal controls are operating effectively. The Head of Internal Audit will be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control and governance processes within the Company. review the adequacy and relevance of the scope, functions, competency and resources of internal audit and the necessary authority to carry out its work; review the internal audit programme and processes and where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function; the extent of cooperation and assistance rendered by the Group’s employees during the audit; and the appraisal of the performance of the internal audit including that of the senior staff and any matter concerning their appointment and termination; take cognisance of resignations of internal audit staff members (for in-house internal audit functions) or the internal audit service provider (for out-sourced internal audit function) and provide the resigning staff member or the internal audit service provider an opportunity to submit his/her reasons for resigning, if necessary.
4.2.3 the quarterly results and year-end financial statements prior to the approval by the Board, focusing particularly on: any changes in or implementation of major accounting policies and practices; significant matters highlighted including financial reporting issues, significant judgements made by management, significant and unusual events or transactions and how these matters are being addressed; the going concern assumption; and compliance with accounting standards, regulatory and other legal requirements.
4.2.4 the major findings of investigations and management response.
4.2.5 To discuss the contracts and nature for the provision of non-audit services which can be entered into by Dolomite Corporation Berhad and its group of subsidiaries with the external auditors or its affiliates and procedures that must be followed. The contracts cannot be entered into should include:-
• Management consulting;
• Strategic decision;
• Internal Audit; and
• Policy and standard operating procedures documentation
In the event that the non-audit fees paid to the Company’s External Auditors, or a firm or corporation affiliated to the External Auditors’ firm are significant (eg. constitute 50% of the total amount of audit fees paid to the Company’s External Auditors) the Company is required to state the details on the nature of non-audit services rendered in the Audit Committee Report.
4.2.6 the propriety of any related party transaction and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity and the framework established/ to be established.
4.2.7 To consider other areas as defined by the Board or as may be prescribed by Bursa Securities or any other relevant authority from time to time.
4.3 To report promptly any matters resulting in the breaches of the Bursa Securities Main Market Listing Requirements to the Board. Where the Audit Committee is of the opinion that such matter reported by it to the Board has not been satisfactorily resolved, the Audit Committee shall promptly report such matter to Bursa Securities.
4.4 To prepare the Audit Committee Report for inclusion in the Company’s Annual Report covering:
4.4.1 the composition of the Audit Committee including name, designation (indicating the chairman) and directorship of the members (indicating whether the directors are independent or otherwise);
4.4.2 the number of audit committee meetings held during the financial year and details of attendance of each audit committee members;
4.4.3 a summary of the work of the Audit Committee in the discharge of its functions and duties for that financial year of the listed issuer and how it has met its responsbilities; and
4.4.4 a summary of the work of the internal audit function.
4.5 To review the following for publication in the Company’s Annual Report:
4.5.1 the disclosure statement of the Board on: the Company’s applications of the principles set out in the Malaysian Code on Corporate Governance; and the extent of compliance with the best practices set out in the Malaysian Code on Corporate Governance, specifying reasons for any area of non-compliance and the alternative measures adopted in such areas.
4.5.2 the statement on the Board’s responsibility for the preparation of the annual audited financial statements.
4.5.3 the disclosure statement on the state of the internal controls system of the Company and of the Group.
4.5.4 other disclosures forming the contents of the Company’s Annual Report spelt out in Part A of Appendix 9C of the Listing Requirements.

The above functions and duties are in addition to such other functions as may be agreed from time to time by the Committee and the Board.

The Head of the Outsourced Internal Audit Function shall have unrestricted access to the Audit Committee Members and report functionally directly to the Audit Committee whose scope of responsibility includes overseeing the internal audit functions. The Company has outsourced its internal audit functions to RSM Corporate Consulting Sdn Bhd.

Any revision or amendment to this Terms of Reference, as proposed by the Audit Committee or any third party, shall first be presented to the Board for its approval. Upon the Board’s approval, the said revision or amendment shall form part of this Terms of Reference and this Terms of Reference shall be considered duly revised or amended.

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