MAUBANK HOLDINGS LTD Audit Committee Charter

1.1 The Audit Committee (hereinafter referred to as ‘the Committee’) assists the Board of Directors in fulfilling its oversight responsibilities related to corporate accounting, financial reporting practices, quality and integrity of financial reports, compliance, internal controls, risk management and business ethics.

2.1 The Committee shall comprise at least three (3) non- executive directors appointed by the Board and the majority shall preferably be independent directors.

2.2 The Board shall appoint a Chairperson from independent members of the Committee.

2.3 The Chairperson of the Board, the Chief Operations Officer/ Chief Executive Officer and any executive director shall not be eligible to be appointed as Chairperson or member of the Committee.

2.4 Each member of the Committee must be financially aware, and the Board shall satisfy itself that the Chairperson has relevant financial experience and expertise.

2.5 The Board shall have the power at any time to remove any members from the Committee and to fill any vacancies created by such removal.

2.6 Only members of the Committee have the right to attend Committee meetings. However, the Committee may invite other persons to attend all or part of any meeting, as deemed necessary and appropriate.

3.1 The Company Secretary shall act as the Secretary of the Committee.

4.1 The quorum necessary for the transaction of business shall be a majority of members.

The Committee shall meet at least twice a year or otherwise as required.  

6.1 Meetings of the Committee shall be called by the Secretary of the Committee at the request of the Chairperson of the Committee or Executive Director any of its members or at the request of the External Auditor or Internal Auditor or Risk Officer if they consider it necessary.

6.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the Committee and any other person required to attend the meeting within a reasonable time.

7.1 Minutes shall be drawn for every Committee meetings and signed by the Chairperson.

8.1 Decision may also be taken by way of written resolution signed by all members of the Committee.

The Committee should carry out the following duties and responsibilities: –

9.1.    Auditors and External Audit

9.1.1. The Committee may be requested to recommend to the Board which firm(s), subject to the Procurement Guidelines and Process set by the Company, should be appointed as External Auditor(s).

9.1.2. The Committee will:

• Evaluate the independence, performance and effectiveness of the External Auditor(s)
• Consider and make recommendations on the appointment and retention of the External Auditor(s), and any questions of resignation or dismissal of the Auditor(s);
• Discuss and review, with the External Auditor(s) before the start of audit commences, the Auditor(s) engagement letter, the terms, nature and scope of the audit function, the timing, new auditing standards, audit approach, reports and the audit fee with a view to obtain value for money services,
• Consider any problems identified and improvements to existing internal control system and risk management proposed by external auditors
• Consider accounting treatments, significant transactions, or accounting judgements, that could be unusual;
• Identify key matters raised during audit and arising in the current year’s management letter and satisfy itself that these are being properly followed up;
• Obtain assurance from the External Auditor(s) that adequate accounting records and systems are being maintained to ensure completeness and reliability.

9.2.    Financial Statements

9.2.1  The Committee will examine and review the annual financial statements, the interim reports, any report regarding the company’s results or other financial information to be made public, prior to submission and approval by the Board, focusing particularly on:

• The implementation of new systems;
• Tax and litigation matters involving uncertainty;
• Any changes in accounting policies and practices and Major judgmental areas;
• Significant adjustments resulting from the audit;
• The basis on which the company has been determined a going concern and

Capital adequacy;

• Compliance with the financial conditions of loan covenants;
• Compliance with international financial reporting standards, and legal requirements where applicable;
• Review the annual report and accounts taken as a whole, to ensure they present a balanced and understandable assessment of the position, performance and prospects of the company;
• Review the External Auditor(s) proposed audit certificate;
• Discuss problems and reservations arising from the audit, and any matters the auditor(s) may wish to discuss (in the absence, where requested by the Committee, of executive directors, and any other person who is not a member of the Committee);
• Review the External Auditors’ management letter and management response; and
• Change in audit fees (if any) after completion of audit exercise.

9.3.    Internal Control and Internal Audit

9.3.1  An important role of the Committee will be to monitor and supervise the effective function of the internal audit, ensuring that the roles and functions of the external audit with internal audit are sufficiently clarified and co-ordinated to provide an objective overview of the operational effectiveness of the company’s systems of internal control and reporting. This will include:

• Reviewing the internal audit function’s compliance with its mandate as approved by the Committee and the independence of internal auditors;
• Reviewing the effectiveness of the company’s systems of internal control, including internal financial control and enterprise risk management and reporting;
• Reviewing findings, conclusions and recommendations from the internal audit exercise;
• verify follow-up by internal auditors on the adequacy of corrective action taken in response to significant internal audit findings; and
• Reviewing management responses to internal audit findings reported.

9.4.    Risk Management

The Duties of the Committee pertaining to Risk management shall include the following:

• Consider and recommend to the Board the establishment and implementation of the Risk Management Framework (“RMF”) which also encompasses the Risk Management Strategies and processes;
• Review and recommend to the Board areas where risk assessment exercises should be conducted including the risk identification and assessment methodologies proposed by Management;
• Considering and taking appropriate action on the exposure of the Company to market risk, credit risk, liquidity risk, operational risk, commercial risk and any other risks appropriate to investment management and financial activities which may be identified from time to time;
• Review and recommend to the Board the remedial plans as proposed by Management, to mitigate the impact of risks;
• Review of the practices of the Company to ensure that any transactions that may have a material effect on the stability, solvency and reputation of the Company are identified in a timely manner and dealt with; and

The Committee shall also consider any other matters as may be instructed by the Board from time to time.

10.1 The Committee shall make recommendations to the Board as it deems appropriate, on any area within its remit where action or improvement is needed.to time.

The Committee shall:

11.1 Have access to sufficient resources in order to carry out its duties, including access to the Company secretary for assistance as required.

11.2 Work and liaise as necessary with all other Board Committees.

11.3 Arrange for periodic reviews of its own performance and, as when required, review its charter to ensure it is operating at maximum effectiveness and recommend any charges it considers necessary to the Board for approval.

12.1 The Committee is authorized by the Board to obtain, at the company’s expense, legal or other professional advice on any matter within its terms of reference.