Terms Of Reference For Audit And Risk Management Committee

Terms Of Reference For Nominating Committee

Terms Of Reference For Remuneration Committee

Overview

Terms Of Reference For Audit And Risk Management Committee

Terms Of Reference For Nominating Committee

Terms Of Reference For Remuneration Committee

Terms Of Reference For Audit And Risk Management Committee

Terms Of Reference For Audit And Risk Management Committee

1. Objectives

The primary function of the Audit and Risk Management Committee (the “Committee”), formed by the Board, is to assist the Board of Directors in fulfilling its fiduciary duties as well as the following oversight objectives on the activities of the Group [comprising Innity Corporation Berhad and its subsidiaries]:

  • oversee financial reporting process; and
  • evaluate the internal and external audit processes, including issues pertaining to the system of internal control and risk management within the Group.

2. Composition

The Board shall elect the Committee members from amongst themselves, comprising no fewer than three (3) Directors (none of whom shall be Executive or Alternate Director) and the majority shall be Independent Non-Executive Directors. In this respect, the Board adopts the definition of “independent directors” under the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). All the members shall be financially literate and at least one (1) member of the Committee shall be:

  • a member of the Malaysian Institute of Accountants (“MIA”); or
  • if he is not a member of MIA, he must have at least three (3) years of working experience and:
    • he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or
    • he must be a member of the associations of accountants specified in Part II of the Accountants Act 1967; or
    • fulfils such other requirements as prescribed or approved by Bursa Securities.

The Chairman of the Committee shall be an Independent Non-Executive Director and is not the Chairman of the Board.

In the event of any vacancy in the Committee resulting in the non-compliance of Rules 15.09(1) and 15.10 of the ACE Market Listing Requirements of Bursa Securities, vacancy must be filled within 3 months.

It is required for a former key audit partner to observe a cooling-off period of at least two years before being appointed as a member of the Committee.

The term of office and performance of the Committee and each of its members shall be reviewed by the Nomination Committee annually to determine whether the Committee and its members have carried out their duties in accordance with their terms of reference.

3. Quorum and Meeting Procedures

Meetings shall be conducted at least four (4) times annually, or more frequently as circumstances dictate. The Chairman may call for a meeting of the Committee if a request is made by any Committee member, the Group Managing Director or the internal or external auditors.

In order to form a quorum for the meeting, the majority of the members present must be Independent Non-Executive Directors. In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members present.

The Company Secretary, his/ her representative or other appropriate senior officer shall act as secretary of the Committee (the “Secretary”). The Secretary, in conjunction with the Chairman, shall draw up an agenda, which shall be circulated together with the relevant support papers, at least seven (7) days prior to each meeting to the members of the Committee.

The Committee may, as and when deemed necessary, invite other Board members and Senior Management members to attend the meetings.

The Committee shall meet with the external auditors and internal auditors without the presence of any executive Board members, Management or employees, whenever deemed necessary. In addition, Management, the internal auditor and external auditors may request for a private session with the Committee to discuss any matter of concern.

The Committee shall regulate the manner of proceedings of its meetings, having regard to normal conventions on such matter. A resolution in writing, signed by all the members of the Committee, shall be as effectual as if it has been passed at a meeting of the Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more committee members.

The Committee members may participate in a meeting by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting.

4. Authority

The Committee is authorised by the Board to investigate any activity within its terms of reference. It is also authorised to seek any information it requires from any employee and employees are directed to co-operate with any request made by the Committee. The Committee can obtain, at the expense of the Company, outside legal or other independent professional advice it considers necessary in the discharge of its responsibilities.

The Committee shall have full and unlimited access to any information pertaining to the Group. The Committee shall have direct communication channels with the internal and external auditors and with Senior Management of the Group and shall be able to convene meetings with the external auditors, the internal auditors or both excluding the attendance of other directors and employees of the Group, whenever deemed necessary. The Committee shall have the resources that are required to perform its duties.

Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the ACE Market Listing Requirements of Bursa Securities, the Committee shall promptly report such matter to Bursa Securities.

5. Responsibilities and duties

In fulfilling its primary objectives, the Committee shall undertake the following responsibilities and duties:

  1. External Audit
    1. review with the external auditors, the audit scope and plan, including any changes to the scope of the audit plan;
    2. review the external audit reports to ensure that appropriate and prompt remedial action is taken by Management on major deficiencies in controls or procedures that are identified;
    3. review major audit findings and Management’s response during the year with Management and external auditors, including the status of previous audit recommendations;
    4. to set policies and procedures to assess the suitability, objectivity and independence of the external auditors;
    5. review the non-audit services provided by the external auditors and/or its network firms to the Company for the financial year, including the nature of the non-audit services, fee of the non-audit services, individually and in aggregate, relative to the external audit fees and safeguards deployed to eliminate or reduce the threat to objectivity and independence in the conduct of the external audit resulting from the non-audit services provided;
    6. To review and assess each year, the suitability, objectivity and independence of external auditors;
    7. review the appointment, re-appointment, decision to not re-appoint, resignation or removal of external auditors and the audit fee before making recommendations to the Board; and
    8. review the assistance given by the Group’s officers to the auditors, and any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information.
  2. Internal Audit Function
    1. ensure the internal audit function is independent of the activities it audits and the head of internal audit reports functionally to the Committee directly and review their performance on an annual basis. The head of internal audit shall be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control, and governance processes within the Company;
    2. take cognisance of resignations of internal audit staff members (for in-house internal audit function) or the internal audit service provider (for out-sourced internal audit) and provide the resigning staff member or the internal audit service provider an opportunity to submit his reasons for resigning;
    3. review the adequacy of the internal audit scope and plan, including the internal audit programme; functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work; and
    4. review the internal audit reports to ensure that appropriate and prompt remedial action is taken by Management on major deficiencies in controls or procedures that are identified.
  3. Internal Control and Risk Managementn
    1. review the risk profile of the Group (including risk registers) and the Risk Management team’s plans to mitigate business risks as identified from time to time;
    2. review the adequacy and integrity, including effectiveness, of risk management and internal control systems/framework, management information system, and the internal auditors’ and/or external auditors’ evaluation of the said systems; and
    3. direct and, where appropriate, supervise any special projects or investigation considered necessary, and review investigation reports on any major defalcations, frauds and thefts.
  4. Related Party Transactions
    1. review 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 question of Management’s integrity.
  5. Disclosure Obligations
    1. review the quarterly results and the year end financial statements, prior to approval by the Board, focusing particularly on:
      • changes in or implementation of major accounting policy changes;
      • significant matters highlighted including financial reporting issues, significant judgments made by management, significant and unusual events or transactions, and how these matters are addressed; and
      • compliance with accounting standards and other legal requirements.
    2. prepare reports, at the end of each financial year to the Board which includes the following:
      • the composition of the Committee, including the name, designation (indicating the chairman) and directorship of the members (indicating whether the directors are independent or otherwise);
      • the number of Committee meetings held during the financial year and details of attendance of each Committee member;
      • a summary of the work of the Committee in the discharge of its functions and duties for that financial year and how it has met its responsibilities; and
      • a summary of the work of the internal audit function.
  6. Others
    1. review procedures in place to ensure that the Group is in compliance with the Companies Act 2016 and ACE Market Listing Requirements of Bursa Securities and other legislative and reporting requirements;
    2. any other activities, as authorised by the Board; and

6. Annual General Meeting

The Chairman of the Committee should attend the Annual General Meeting to answer any shareholder questions on the Committee’s activities.

7. Minutes

All the minutes of meetings of the Committee shall be kept at the Registered Office and copies thereof shall be circulated to all members of the Board. Any request by Management/ other person(s) to inspect the minutes shall be subject to the approval of the Committee.

8. Revision of the Terms of Reference

Any revision or amendment to this Terms of Reference, as proposed by the 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.

(This Revised Terms of Reference for the Audit and Risk Management Committee was approved and adopted by the Board on 21 February 2020)

Terms Of Reference For Nominating Committee

Terms Of Reference For Nominating Committee

1. Objectives

The Nominating Committee (the “Committee”) of Innity Corporation Berhad (the “Company”) was formed by the Board of Directors of the Company. Its primary function, in line with the Malaysian Code on Corporate Governance, is to assist the Board in the following areas:

  • Proposing new nominees for the Board of the Company and/or its subsidiaries (the “Group”) - the actual decision as to who shall be nominated shall be the responsibility of the full Board after considering the recommendations of the Committee;
  • Appraise each individual Director, including Independent Non-Executive Directors as well as the Group Managing Director (“Group MD”) in terms of their individual experience, knowledge, credibility and credentials, and assess their effectiveness and contribution in carrying out their obligations and duties as a Board member of the Company;
  • Examine the ability of each Director, including the Group Managing Director, to contribute to the effective decision-making process of the Board and ensure that the Board of our Company is functioning actively, efficiently and effectively in all its decision making; and
  • Assess the effectiveness, size and composition of the Board of Directors as a whole and the committees of the Board.

2. Composition

  1. The membership of the Committee shall comprise exclusively Non-Executive Directors, a majority of whom are independent and number at least three (3) in total.
  2. The Chairman of the Committee shall be an Independent Non-Executive Director.

3. Quorum and Meeting Procedures

The Committee shall meet at least once a year. More meetings may be conducted if the need arises. The quorum for a meeting of the Committee shall be two (2) members, present in person, both of whom are Independent Directors. A resolution in writing, signed by all the members of the Committee, shall be as effectual as if it has been passed at a meeting of the Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more Committee members.

In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members present who would qualify under these terms of reference to be appointed to that position of the Board.

The Committee members may participate in a meeting by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting.

4. Secretary

The Secretary, his/her representative or other appropriate Senior Officer shall act as secretary of the Committee (the “Secretary”).

5. Advisers

The Committee is authorised by the Board to seek appropriate professional advice inside and outside the Group as and when it considers necessary at the expense of the Company.

6. Responsibilities and Duties

In fulfilling its primary objectives, the Committee shall undertake the following responsibilities and duties:-

  1. Nomination/ Election
    1. To evaluate the balance of skills, knowledge and experience on the Board, and hence defined the role and capabilities required for a particular appointment and be responsible for identifying and nominating, for the approval of the Board, candidates to fill Board vacancies as and when they arise.
    2. In making the recommendations, the Committee will also consider candidates proposed by the Group MD, and within the bounds of practicability, by any other senior executive, Director or major shareholder. The Committee shall also utilise independent services to identify suitably qualified candidates. In making its recommendations, the Committee shall assess and consider the following attributes or factors:-
      1. skills, knowledge, expertise and experience;
      2. professionalism
      3. commitment (including time commitment) to effectively discharge his/her role as a Director;
      4. contribution and performance;
      5. background, character, integrity, and competence;
      6. in the case of candidates for the position of Independent Non-Executive Directors, the Committee shall also evaluate the candidates’ ability to discharge such responsibilities/functions as are expected from Independent Non-executive Directors;
      7. boardroom diversity including gender diversity; and
      8. in considering independence, it is necessary to focus not only a Director’s background and current activities qualify him or her as independent but also whether the Director can act independently of management
    3. recommend to the Board, Directors to fill the seats on Board Committees; and
    4. develop, maintain and review the criteria to be used in the recruitment process and annual assessment of Directors. The nomination and the election process should be disclosed in the Annual Report.
  2. Annual Review
    1. review annually the required size and balance, mix of skills, experience, independence, diversity (including gender diversity) and other qualities of the Board, including core competencies which Non-Executive Directors should bring to the Board. This activity shall be disclosed in the Annual Report of the Company;
    2. assess annually the effectiveness of the Board as a whole, the Committees of the Board and the contribution of each individual Director including his time commitment, character, experience and integrity vide a formal and objective assessment. All assessments and evaluations carried out by the Committee in the discharge of all its functions shall be properly documented;
    3. assess annually the effectiveness and performance of the Group MD and Executive Directors;
    4. assess annually the independence of its independent directors, as well as consider and recommend the Independent Directors beyond nine (9) years for continuation in office, having due regard to their performance and ability to continue to contribute to the Board in the light of knowledge, skills and experience required;
    5. assess annually the term of office and performance of the Audit Committee and each of its members to determine whether such Audit Committee and members have carried out their duties in accordance with their Terms of Reference;
    6. assess the training needs of each Director, review the fulfilment of such training, and disclose details in the Annual Report as appropriate; and
    7. consider to recommend the Directors for re-election/ re-appointment at each Annual General Meeting.
  3. Others
    1. review and make recommendations to the Board on Succession Plan for Senior Management;
    2. recommend to the Board protocol for accepting new directorships;
    3. review and define orientation and induction plans for new directors;
    4. recommend to the Board the Company’s gender, age, experience and ethnicity diversity policies and targets and discuss measures to be taken to meet those targets; and
    5. review the Terms of Reference and recommend any changes it considers necessary to the Board for approval periodically or as and when necessary, to ensure it is operating at maximum effectiveness.

7. Annual General Meeting

The Chairman of the Committee should attend the Annual General Meeting to answer any shareholder questions on the Committee’s activities; and

8. Procedures

The Board follows formal and transparent procedures when appointing directors as follows:-

  1. The Committee will look into the characteristics the Board is looking for in a new appointment and/ or seek professional advice as and when it considers necessary to identify a short-list of suitable candidates, sourced from a variety of approaches, which include the use of independent services and recommendation from existing Board members, Management or major shareholder.
  2. All the candidates are interviewed by at least two members of the Committee whose evaluations will be circulated to all the members of the Committee.
  3. The Committee will then have to make a majority decision in recommending the appointment to the Board.
  4. The Board will then decide on the best candidate and a Board resolution will be passed to appoint the candidate.

The Committee shall regulate its own procedure to be followed in the discharge of its duties and responsibilities set out in section 7 above. The regulation and implementation of such procedure shall, as far as circumstances permit be in keeping with the principles and requirements of the Malaysian Code on Corporate Governance.

9. Minutes

All the minutes of meetings of the Committee shall be kept at the Registered Office and copies thereof shall be circulated to all members of the Board. Any request by Management/ other person(s) to inspect the minutes shall be subject to the approval of the Committee.

10. Succession Planning for the Board

The Committee shall, as and when required:

  1. keep under review the leadership needs of the Company, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace.
    1. give full consideration to succession planning in the course of its work, taking into account the challenges and opportunities facing the Company, and the skills and expertise needed on the Board in future;
    2. make recommendations to the Board concerning the succession plans for Executive Directors.
  2. make recommendations to the Board concerning the re-election of any director under the retirement by rotation provisions in the Company’s Constitution.
  3. make any necessary recommendations to the Board concerning the continuation in office, suspension or termination of service of any director (subject, in the case of Company employees to the provisions of their service contracts, if any); and
  4. make recommendations to the Board concerning the continuation (or not) in service of any Independent Director who has served consecutively or cumulatively for more than 9 years.

11. Revision of the Terms of Reference

Any revision or amendment to this Terms of Reference, as proposed by the 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.

(This Revised Terms of Reference for the Nomination Committee was approved and adopted by the Board on 21 February 2020)

Terms Of Reference For Remuneration Committee

Terms Of Reference For Remuneration Committee

1. Objective

The Remuneration Committee (the “Committee”) of Innity Corporation Berhad (the “Company”) was formed by the Board of Directors of the Company. Its primary function, in line with the Malaysian Code on Corporate Governance, is to recommend to the Board the remuneration package of Directors and Key Senior Management of the Company and its subsidiaries (the “Group”) to attract, retain and motivate Directors and Key Senior Management.

2. Composition

  1. The members of the Committee shall comprise wholly or mainly of Non-Executive Directors, a majority of whom are independent and number at least three (3) in total.
  2. The Chairman of the Committee shall be a Non-Executive Director appointed by the Board.
  3. The members will be appointed by the Board and will remain members until there is a change.

3. Secretary

The Secretary, his/her representative or other appropriate Senior Officer shall act as secretary of the Committee (the “Secretary”).

4. Attendance

The Group Managing Director may be invited to attend meetings to discuss the performance of Executive Directors and make proposals as necessary. Executive Directors should play no part in decisions on their own remuneration.

The Committee may appoint external consultants, if deemed expedient, to aid the Committee in the discharge of its duties.

5. Quorum and Meeting Procedures

Meetings shall be held at least once a year. More meetings may be convened when the need arises. The quorum for a meeting of the Committee shall be at least two (2) members, present in person.

The Committee members may participate in a meeting by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting. A resolution in writing, signed by all the members of the Committee, shall be as effectual as if it has been passed at a meeting of the Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more Committee members.

6. Annual General Meeting

The Chairman of the Committee should attend the Annual General Meeting to answer any shareholder questions on the Committee’s activities.

7. Advisers

The Committee is authorised by the Board to seek appropriate professional advice inside and outside the Group as and when it considers necessary at the expense of the Company.

8. Dutiess

The duties of the Committee shall include the following:-

  1. assist the Board in developing and administrating a fair and transparent procedure for setting policy on remuneration of Directors and Key Senior management;
  2. setting the remuneration policy for all Directors and Key Senior Management. In determining such policy, take into account all factors which it deems necessary including the relevant legal and regulatory requirements. The objective of remuneration policy is to ensure that the remuneration for Independent Non-executive Directors do not conflict with their obligation to bring objectivity and independent judgement on matters discussed at Board Meetings.
    Whilst, the remuneration policy shall also serve to attract, retain and motivate Executive Directors and Key Senior Management of the quality required to run the Company successfully without paying more than necessary, having regard to the views of shareholders and other stakeholders. The remuneration policy should have regard to the risk appetite of the Company and alignment to the Company’s long term strategic goals. A significant proportion of remuneration for Executive Directors and Key Senior Management should be structured so as to link rewards to corporate and individual performance and designed to promote the long-term success of the Company;
  3. to recommend to the Board the appropriate remuneration packages for the Executive Directors, Non-Executive Directors and Key Senior Management;
  4. to review the fees of the Directors and benefits payable to Directors including any compensation for loss of employment of director or former director and recommend to the Board of Directors and thereafter to be approved at a general meeting;
  5. to consider and review any service contract or remuneration package of newly appointed Executive Director, prior to their appointment;
  6. to recommend the engagement of external professional advisors to assist and/or advise the Committee, on remuneration matters, where necessary;
  7. to review the Terms of Reference and recommend any changes it considers necessary to the Board for approval, periodically or as and when necessary, to ensure the Committee is operating at maximum effectiveness and in line with any legal and regulatory requirement as well as the Malaysian Code on Corporate Governance; and
  8. to consider all other related matters as may be requested by the Board from time to time.

The level of remuneration should be aligned with the business strategy and long-term objectives of the Company, complexity of the Company’s activities, and reflects the experience and level of responsibilities undertaken by the Executive Directors, Non-Executive Directors and Key Senior Management.

The determination of remuneration packages of Executive Directors, Non-Executive Directors and Key Senior Management should be a matter for the Board as a whole where the individuals concerned shall abstain from discussion of their own remuneration.

9. Minutes of meetings

All minutes of meetings of the Committee shall be kept at the Registered Office and copies thereof shall be circulated to all members of the Board. Any request by Management/ other person(s) to inspect the minutes shall be subject to the approval of the Committee.

10. Revision of the Terms of Reference

Any revision or amendment to this Terms of Reference, as proposed by the 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.

(This Revised Terms of Reference for the Remuneration Committee was approved and adopted by the Board on 21 February 2020)