The audit committee of WCT Holdings Berhad (“the Company”) (“the Audit Committee”) is responsible for, amongst others, assisting the Board of Directors of the Company (“Board”) in reviewing, assessing and monitoring the performance, suitability, objectivity and independence of the external auditors of the Company. The objective of this policy is to set out the guidelines and principles to be adopted by the Audit Committee and the Board in discharging their responsibilities under this purview.
The Board has delegated to the Audit Committee the responsibility for the appointment, remuneration and removal of external auditors of the Company.
The appointment, resignation, remuneration and removal of external auditors are also subject to the provisions of the Companies Act 2016 (“CA 2016”) and Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
The Company shall at each annual general meeting appoint or re-appoint the external auditors of the Company, and the external auditors so appointed shall hold office until the conclusion of the next annual general meeting of the Company, pursuant to Section 271 of CA 2016.
Should there be a need to fill a casual vacancy or should the Audit Committee or the Board determine that there is a need to change the external auditors, the Audit Committee shall be guided by the following principles for selection and appointment of new external auditors of the Company:
(a) the external auditors shall be selected from a shortlist of not lesser than three licensed or approved audit firms in Malaysia which are recognised by the Malaysian Institute of Accountants (“MIA”) and the Malaysian Institute of Certified Public Accountants;
(b) the suitability of the audit firm as the external auditors of the Company should take into consideration the following factors:-
(i) the independence of the audit firm, the proposed audit partner and audit team members including the process deployed by the audit firm to ensure their on-going independence;
(ii) the audit firm’s reputation and presence in the industry as well as proven track record in auditing an organisation which is comparable to the Company in terms of total revenue, market capitalisation, total assets value and net assets value of the Group;
(iii) the qualification and experience of the proposed audit partner and audit team members;
(iv) the audit firm’s affiliation and resources to address overseas subsidiaries/joint ventures;
(v) audit methodologies employed by the audit firm for key issues relating to the Group; and
(vi) the proposed terms of engagement and fee structure vis-à-vis their scope of services.
(c) the process of shortlisting, selection and agreement on the terms of engagement of the suitable audit firm as the external auditors of the Company should be duly documented;
(d) the final terms of engagement of the selected audit firm as the external auditors of the Company shall be subject to the approval of the Board; and
(e) The appointment and re-appointment of the external auditors of the Company is subject to the approval of the shareholders of the Company to be obtained at the annual general meeting of the Company.
The external auditors, the audit partner and audit team members in charge of the external audit of the Company should at all time maintain their independence and avoid any situation which may impair their independence or result in conflict of interest with their role as external auditors of the Company.
In order to support the assessment on independence, the Audit Committee shall obtain a written assurance from the external auditors of the Company on an annual basis confirming that they are, and will continue to remain, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.
The external auditors or a firm or corporation affiliated to the external auditors of the Company may be engaged to perform non-audit services to the Group provided that such services are not, and will not be perceived to be, in conflict with their role as the external auditors of the Company. Non-audit services exclude audit related work performed in connection with the annual external audit and in compliance with statutory requirements.
The provision of non-audit services shall be based on three (3) principles as follows:
(a) the external auditors should not participate in the decision making nor in any role of Management of the Company and/or its subsidiaries (“the Group”);
(b) the external auditors cannot audit their own work; and
(c) the external auditors cannot serve in an advocacy role of the Group.
The external auditors shall observe and comply with the By-Laws (on Professional Ethics, Conduct and Practice) by MIA, which prohibit the following non-audit services (non-exhaustive):-
(i) accounting and book keeping services;
(ii) valuation services;
(iii) taxation services;
(iv) internal audit services;
(v) information system design & implementation services;
(vi) dispute and litigation advocacy services;
(vii) recruitment services; and
(viii) corporate finance services.
Any engagement of the external auditors or a firm or corporation affiliated to the external auditors of the Company for the provision of any non-audit services which exceeds the engagement fee of RM100,000-00 for each assignment or which results in the cumulative non-audit services fees exceeding 50% of the total audit fees paid or payable to the external auditors for any particular financial year, is subject to the approval/endorsement of the Audit Committee before commencement of the non-audit services.
Before the engagement of the external auditors or a firm or corporation affiliated to the external auditors of the Company for such non-audit services, the external auditors shall declare their independence and confirm that their independence as external auditors of the Company will not be impaired by the provision of such non-audit services to the Group.
The amount of non-audit fees paid or payable to the external auditors, or a firm or corporation affiliated to the external auditors’ firm, stating the amount incurred by the Company and the Group shall be disclosed in the Annual Report of the Company. If the non-audit fees incurred were significant (i.e. if they constitute more than 50% of the total audit fees paid or payable to the external auditors on a group basis), details on the nature of the services rendered shall also be disclosed in the Company’s Annual Report.
The audit partner responsible for the external audit of the Company is subject to a mandatory rotation at least every seven (7) financial years or such period in accordance with the By-Laws of MIA.
A person who is a former audit partner in charge of the external audit of the Company is required to observe a cooling-off period of at least five (5) years before he/she can be considered to be appointed as a director or a member of the Audit Committee or senior management team of the Company.
The Audit Committee shall review the external auditors’ proposed annual audit fees and recommend as appropriate to the Board for final approval.
A review through a benchmarking exercise on the external auditors’ fees shall be performed once every five (5) years or otherwise upon request by the Board.
The Audit Committee shall carry out an annual assessment on the performance, suitability and independence of the external auditors of the Company, taking into the consideration the following four (4) key factors:
(a) quality of services rendered over the past financial year;
(b) sufficiency of resources extended to the Company;
(c) communication and interaction with the Board, Audit Committee and management; and
(d) independence, objectivity and professional scepticism exhibited.
The Audit Committee will review this Policy periodically to ensure that it continues to remain relevant and appropriate.
