a) Board Charter
b) Terms of Reference of
    Audit Committee

c) Terms of Reference of
    Nomination Committee

d) Terms of Reference of
  Remuneration Committee

e) Code of Conduct
    And Ethics

f) Whistleblowing Policies
    and Procedures

g) Anti-Corruption Policies
    and Procedures

h) Shareholder
    Communication Policy

i) Remuneration Policy
   and Procedures

j) Policies and Procedures
   to Assess the Suitability
   and Independence of
   External Auditors

k) Extract Minutes of
   General Meetings

Policies and Procedures to Assess the Suitability and Independence of External Auditors

 

OBJECTIVE

The objective of this policies and procedures is to ensure that the Group has external audit independence in line with best practice to ensure reliable and credible financial reporting.

The Audit Committee of the Company is responsible to assess, review and monitor the performance, suitability and independence of the external auditors. The Policies and Procedures to Assess the Suitability and Independence of External Auditors ("Policy") provides the Audit Committee with guidelines to assess and review the performance of the external auditors for the purpose to ensure the suitability and independence of the external auditors.

 

PROVISION OF COMPANIES ACT, 2016

In accordance with Section 271 of the Companies Act, 2016, an auditor of a public company shall be appointed for each financial year and should only be appointed by the Board or Members of the Company.

The Board shall appoint an auditor—

a)            at any time before the first annual general meeting of the company and the auditor will hold office until the conclusion of the first annual general meeting for the appointment; or
b)            to fill casual vacancy in the office of the auditor and the auditor will hold office until the conclusion of the next annual general meeting for the appointment.

The members shall appoint an auditor by ordinary resolution—

a)            at the annual general meeting;
b)            if the company should have appointed an auditor at an annual general meeting but failed to do so; or
c)            if the Board fails to appoint an auditor as mentioned above.

 

SELECTION CRITERIA

The Audit Committee will evaluate potential external auditors on a number of criteria including, but not limited to:

a)            The auditor being registered as an auditor under the Companies Act, 2016;
b)            The auditor being registered with the Audit Oversight Board for public companies under the Securities Commission Act, 1993;
c)            The independence of the external audit firm from the Company and ability to maintain independence throughout the engagement;
d)            There being no conflict of interest situations that could affect the independence of the external auditors;
e)            Internal governance processes such arrangements that are proposed to enable partner rotation and succession planning;
f)             Reputation, professional competency, experience, resources and integrity of key personnel;
g)            The audit approach and methodology; and
h)            Cost effectiveness.

SELECTION AND APPOINTMENT PROCEDURES

In the event that the Audit Committee decides a new external auditors is required:

a)            The Audit Committee will construct a shortlist of candidates that meet their selection criteria and ascertain their willingness to act;
b)            Interested candidates will be required to submit a proposal addressing the Audit Committee's criteria as well as a statement that they are independent;
c)            The Audit Committee will interview candidates in order to further assess their suitability;
d)            Once the assessment process has been completed, the Audit Committee informs the Board of the process adopted in undertaking the review, the external auditor recommended by the Committee and the reasons for that recommendation; and
e)            Upon the Board of Directors endorsed the recommendation, to seek shareholders' approval for the appointment of the new external auditors and resignation/removal of the existing external auditors at the general meeting.

 

ASSESSMENT OF EXTERNAL AUDITORS

The Audit Committee will review the performance of the external auditors on an annual basis after completion of the year end audit. In evaluating the effectiveness of external audit, the Audit Committee will assess the effectiveness of external auditors based on a number of criteria including but not restricted to:-

a)            the overall comprehensive of the external audit plan;
b)            the timeliness and quality of communications promised under the plan and delivered during the audit;
c)            the competency of external audit staff; and
d)            the adequacy of resources to achieve the scope as outlined in the plan.

The Audit Committee will seek feedback from management during the assessment process.

 

EXTERNAL AUDITORS INDEPENDENCE

The Audit Committee will review the independence of the external auditors annually at the time the external auditors present its annual audit plan. The Audit Committee will review and assess the independence of the external auditors, including but not limited to any relationships with the Group or any other person or entity that may impair or compromise, or appear to impair or compromise, the external auditors' independence. The Audit Committee will request the external auditors to provide a written assurance confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

 

PROVISION OF NON-ASSURANCE SERVICES OF EXTERNAL AUDITORS

The external auditors can be engaged to perform non-assurance engagement that are not, and are not perceived to be, in conflict with the role of the external auditors. This excludes audit related work in compliance with statutory requirements.

The three (3) basic principles on the prohibition of non-assurance engagement are as follows:

a)            Not to function as Management;
b)            Not to audit their own work; and
c)            Not to serve in an advocacy role of the Company and its subsidiaries.

The external auditors shall observe and comply with the By-Laws of the Malaysian Institute of Accountants in relation to the provision of non- assurance engagement.

All engagements of the external auditors or its affiliates to provide non-assurance services are subject to the approval by the Audit Committee and with expectation on the Management to obtain confirmation from the external auditors on their independence which shall not be impaired by the provision of non-assurance engagement except for pre-approved non-assurance services as set out in Appendix A of the Policy.

ROTATION OF AUDIT PARTNER

The audit partner responsible for the external audit of the Company and its subsidiaries is subject to rotation at least every seven (7) years.

The former key audit partner has to observe a cooling-off period of at least three (3) years before being appointed as a member of the Audit Committee.

 

ANNUAL AUDIT PLANNING 

The external auditors shall present an annual audit planning memorandum for review and discussion with the Audit Committee. The external auditors shall also provide a management letter to the Audit Committee upon completion of the annual audit.

 

REVIEW OF THE POLICIES AND PROCEDURES

These policies and procedures will be periodically reviewed in accordance with the needs.

 

 

 


 

 

 

Appendix A

 

 

PAOS HOLDINGS BERHAD AND ITS SUBSIDIARIES

LIST OF PRE-APPROVED NON-ASSURANCE SERVICES

Tax related services

—           Preparing corporate tax returns for submission to the tax authorities.
—           Providing training on deferred tax (without using current year's figures in the examples).
—           Dealing with the Tax Authority
•              Assisting with tax authority requests for additional information, analysis and/or explanations in relation to a tax return.
•              Assisting with a tax examination by the tax authority.
•              Review of tax assessment notices / audit findings letters/ bill of demand issued by the tax authority.
•              Filing of administrative remedies against tax assessment notices/ audit findings letters/ bill of demand issued by the tax authority.
—           Transfer pricing
•              Assisting to assess the impact of transfer pricing policies on overall tax position.
•              Analysing and document transactions between related parties.  Preparing global and local documentation.
•              Translating transfer pricing policies into transaction level prices, reconcile transfer pricing and customs requirements and automate transfer pricing calculations.
—           Tax due diligence (buy-side and vendor initiated)
•              Typically covering group structure and tax history, compliance/tax audit status, tax risks identified, effective tax rate analysis, review of tax accruals, tax implications of the proposed transaction, etc.
—           Prepare indirect tax returns for submission to the tax authorities.
—           International Executive Services
•              Assist on development of tax efficient compensation and reward packages for international assignees.
•              Assist on employment compensation and benefit programs for international assignees.
•              Assist on the tax implications of global employment companies.
•              Preparing and filing of international assignee tax returns.
•              Immigration services including:
o             Preparing and making visa and work permit applications.
o             Advising on related immigration requirements.
o             Serving as a liaison between the applicant and immigration departments.
—           Conduct general training with audit client personnel, audit committee and others on tax related matters.

 

Other non-assurance services
—           Agreed-upon procedures engagement to comply with regulatory reporting matters in accordance International Standard on Related Services 4410 (Revised) Compilation Engagements. 
—           Compilation engagement to compile financial statements in accordance International Standard on Related Services 4400 (Revised) Agreed-Upon Procedures Engagements.
—           Reporting accountant engagements in relation to corporate exercises.
—           Provision of accounting advice and assistance:
•              Review and provide comments on client-prepared technical accounting and reporting memos.
•              Conduct general training with audit client personnel, audit committee and others on new accounting standards or existing accounting standards.
•              Perform gap analysis of client's accounting policies and disclosures against leading practices or other resources.
•              Read and comment on client's documentation of accounting policies and accounting manuals.
•              Participate in discussions with client personnel on application of accounting standards to actual or proposed transactions and provide observations and recommendations.
•              Advise on industry and corporate governance requirements.

—           Assessment – Gap analysis for internal use
•              Perform gap analysis or maturity assessment of the current state of a process, system, organizational structure, policy, controls over financial reporting etc. against leading practices or other resources (such as accounting or regulatory standard).  Provide advice, observations and recommendations.

—           Document current state
•              Assist in documenting the current state and/or changes made to processes, systems, organizational structure, policies, or internal control over financial reporting, after they have been implemented, on non-recurring basis.

—           Design plans
•              Provide generic roadmap or implementation plan of a process or system based on leading practice experience that is not client-specific.

—           Project Management – Advice
•              Provide general advice on developing project plans, including general advice on project management.
•              Provide industry standard or best practice project plans.
•              Provide feedback to project management office structure/organization.

—           Transaction services – Buy side
•              Pre close due diligence.
•              Post close due diligence.

—           Commercial due diligence (buy side)
•              Analysis of target's projections/business plan by reference to historical evidence.
•              Report market and commercial issues which may affect the target and transaction.

—           Market research and benchmarking

—           Operational due diligence

—           Sell side assist, including:
•              Pre-sale due diligence.
•              Establish and coordinate data room activities (limited to administrative tasks, does not include data room set up).

—           Separation services including separation advice, separation program planning and execution.

—           Assistance on Sales and Purchase Agreement and completion accounts:
•              Provide commentary (in conjunction with client's lawyers) on draft transaction agreements).
•              Providing advice and recommendations on the preparation of the completion accounts.
(This service does not include completion due diligence on completion accounts)
—           Integration due diligence, in connection with:
•              Pre-acquisition synergy and integration planning, post-acquisition integration planning, and operations advice, provided such work is unrelated to the client's financial statements, accounting records and risk management controls.

—           Word processing services, which include:
•              rolling forward the Company's prior year financial statements by removing the comparatives and moving the previous year's current figures over to comparatives column and leaving blanks for the current year column;
•              taking management prepared statutory financial statements, format and type them using a standard template; and

•              reproduction assistance which includes printing and binding of the final financial statements approved by the Board of Directors.