U.D. Wood Products Sdn Bhd/ Syarikat U.D. Trading Sdn Bhd/ U.D. Panelform Sdn Bhd
 

TERM OF REFERENCE OF THE AUDIT COMMITTEE

 
1.0 Objectives
 
The principal objective of the Committee is to assist the Board in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the Group. In addition, the Committee shall also oversee compliance with laws and regulations and observance of a proper code of conduct.

The Committee is formally constituted with written terms of reference. All members of the Committee have a working familiarity with basic finance and accounting practices
 

 

2.0 Composition
 
The Committee shall be appointed by the Board from amongst the Directors and shall consist no fewer than 3 members, all of them must be Non-Executive Directors, with a majority of them being Independent Directors. The member of the Audit Committee shall elect a chairman from among their members who shall be an independent Director. An alternate Director must not be appointed as a member of the Audit Committee.

At least one member of the Committee:

  Must be a member of the Malaysian Institute of Accountants; or

  If he is not a member of the Malaysian Institute of Accountants, he must have at least three years’ working experience and;
  He must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1976; or
  He must be a member of one of the association of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1976.


If a member of the Committee resigns, dies, or for any reason ceases to be a member with the results that the number of members is reduced to less than three, the Board of Directors shall, appoint such number of members as may be required to make up the minimum number of three members.

The Company Secretary shall be the Secretary of the Committee.
 

 

3.0 Authority
 
The Committee is authorized by the Board to investigate any activities within its terms of reference and shall have unlimited access to external auditors as well as the employees of the Group. All employees are directed to co-operate with any request made by the Committee.

The Committee shall have the authority to obtain independent legal or other professional advice as it considers necessary.

It shall also have the power to establish Sub-Audit Committee to carry out certain investigations on behalf of the Committee and such manner, as the Committee shall deem fit and necessary.
 

 

4.0 Meetings
 
The Committee shall meet at least four (4) times in a year, and such additional meetings as the Chairman shall decide in order to fulfill its duties. The agenda for the Committee meetings shall be circulated before each meeting to members of the Committee. Upon request of any of its members or the Internal or External Auditors, the Chairman of the Committee shall convene a meeting of the Committee.

The Chairman of the Committee should engage, on a continuous basis, with senior management and the External Auditors in order to be kept informed of matters affecting the Company.
 

 

5.0 Quorum
 
The quorum for the Committee meeting shall consist of two (2) members of whom the majority of the members present shall be Independent Directors.
 

 

6.0 Attendance at Meetings
 
The Company Secretary shall be the Secretary of the Committee and shall be responsible for the coordination of administrative details including sending out notice of meetings, preparing and keeping minutes of meetings. The minutes of the Committee meetings are to be extended to the Board.

The head of finance, a representative of the outsourced Internal Auditors and a representative of the External Auditors shall normally attend meetings. The Committee may invite any person to be in attendance to assist in its deliberations. Other Board members may attend meetings upon the invitation of the Committee. The Committee shall meet with the external auditors without Executive Board members present at least twice a year
 

 

7.0 Duties and Responsibilities
 
The duties and responsibilities of the Committee shall be as follows and will cover the Group:
  Review and assess the adequacy and effectiveness of the system of internal control and accounting control procedures by reviewing the External Auditors’ management letters and management response.

  Consider the nomination and appointment of External Auditors, their terms of appointment and reference, the audit fees, any questions of resignation or dismissal and other related matters.

  Review the adequacy of the scope, functions, competency, resources of the internal audit functions and that it has the necessary authority to carry out its work.

  Review the quarterly results and year-end financial statements prior the Board’s approval, focusing particularly on :
  any changes in or implementation of major accounting policies and practices.
  significant adjustments and unusual events arising from the audit.
  the going-concern assumption.
  compliance with accounting standards, Listing Requirements of Bursa Securities and other legal requirements.
  Review any related party transactions and conflict of interests situation that may arise within the Group including any transaction, procedure or course of conduct that raises question of management integrity.

  Review with the External Auditors the nature and scope of their audit plan, prior to the commencement of audit work.

  Discuss the problems and reservations arising from the interim and final audits and any matter the External Auditors may wish to discuss.

  Review the assistance and co-operation given by the officers of the Group to the External Auditors.

  Report promptly to Bursa Securities if it is of the view that a matter reported by it to the Board not been satisfactorily resolved resulting in breach of the Main Market Listing Requirements of Bursa Securities.

  Carry out any other functions as may be determined by the Board from time to time.

  Review the application of corporate governance principles and the extent of the Group’s compliance with the best practices set out under the MCCG 2012.

  Review and approve the whistle blowing policy and risk management framework from time to time and significant changes to risk management policies and strategies.
 

 

8.0 Others
 
As part of the Audit Committee’s efforts to ensure the reliability of the Company’s quarterly financial statements and compliance with applicable Malaysian Financial Reporting Standards, External Auditors have been engaged to conduct a limited review of the Company’s quarterly financial statements before presenting to the Audit Committee for review and recommendation for the Board’s approval and adoption.