Purpose
The purpose of the Audit Committee (AC) is to assist the Board of Directors (Board) of Gopeng Berhad (Company) in fulfilling its corporate governance (CG) responsibilities through the oversight of the financial statements and financial reporting process, the management of risk and system of internal controls, the governance processes, the independence of the Company’s internal and external auditors and ensuring the Company complies with laws and regulatory requirements pertaining to financial matters.

The AC was established in 1994 and comprise three independent non-executive directors.  The members of the AC are

• •    Dato’ Shaharuddin bin Haron (Chairman);
• •    Haji Abdullah bin Yusof; and
• •    Dato’ Robert Lim Git Hooi

and they have a sound knowledge of finance and accounting and one of its members, Dato’ Robert Lim Git Hooi, is a member of the Malaysian Institute of Accountants.

Terms of Reference

Membership

The Committee shall be appointed by the Board from amongst their numbers and shall consists of not less than three (3) members, all of whom shall be independent directors and at least one of whom shall be a member of the Malaysian Institute of Accountants or one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act, 1967. The Chairman of the Committee shall be an independent non-executive director. Any vacancy in the Audit Committee must be filled within 3 months.

Meetings and Minutes

Meetings shall be held not less than four (4) times a year and the head of finance,  and representatives of the external auditors and the internal audit service provider shall normally be invited to attend meetings. Any member of the Committee, the external auditors and the internal audit service provider may request a meeting  without any Executive Board member present whenever deem necessary. A quorum shall be two (2) members present. The minutes of each meeting shall be kept and distributed to each member of the Committee and of the Board. The Chairman of the Committee shall report to the Board as and when deem necessary. The Company Secretary shall be the Secretary to the Committee.

Authority

The Committee is authorised by the Board :

i)    investigate any activity within its terms of reference and shall have unrestricted access to both the internal and external auditors and to all employees of the Group;
ii)    to have the resources in order to perform its duties as set out in its terms of reference;
iii)    to have full and unrestricted access to information pertaining to the Company and the Group;
iv)    to have direct communication channels with the external auditors and persons carrying out the internal audit function; and
v)    to obtain external legal or other independent professional advice as necessary.

Responsibility

Where the Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Bhd, the Committee shall promptly report such matter to Bursa Malaysia Securities Bhd. The Chairman of the Audit Committee should engage on a continuous basis with senior management, such as the chairman, the chief executive officer, the finance director, the head of the internal and external auditors in order to be kept informed of matters affecting the Company.

Duties

The duties of the Committee are :

i)    to review the following and report the same to the Board :

• with the external auditor, the audit plan;
• with the external auditor, his evaluation of the system of internal controls;
• with the external auditors, his audit report;
• the assistance given by the Company’s employees to the external auditor;
• any letter of resignation from the external auditors of the Company; and
• whether there is any reason (supported by grounds) to believe that the Company’s external auditors are not suitable for re-appointment.

ii)    recommend the nomination of a person or persons as external auditors
iii)     to consider the appointment, resignation and dismissal of the external and internal auditors and the audit fees;
iv)    to review the quarterly and annual financial statements of the Company and the Group before submission to the Board of Directors, focusing particularly on ;

• any 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;
• significant adjustments resulting from the audit;
• the going concern assumption;
• compliance with accounting standards; and
• compliance with Bursa Malaysia Securities Bhd’s Listing Requirements, the Capital Markets and Services Act, 2007 and other legal requirements.

v)    to discuss problems and reservations arising from the interim and final audits, and any matters the auditors may wish to discuss (in the absence of management if necessary);
vi)    to review the external auditor’s management letter and management’s response thereto;
vii)    to do the following, in relation to the internal audit function, which has been outsourced :-

• assessment of outsourcing risks;
• scope of internal audit work to be outsourced;
• service provider selection process including the independence, qualification, skills and experience, as well as knowledge;
• adequacy of resources deployed and remuneration of the outsourced provider;
• roles and responsibilities of the outsourced provider;
• internal audit framework adopted by the outsourced provider
• access to information, records, physical properties, and personnel as well as reporting workflow; and
• effectiveness of the internal audit service rendered by the outsourced provider and the continuity of such service.

viii)    To ensure that the internal audit function, which had been outsourced, is involved in the following :

• review and objective evaluation of the governance, risk and control environment of the Company and entities throughout the Group;
• systematic analysis of business processes to identify the associated controls in place;
• assessment of how information on fraud and irregularities is reported including providing feedback on adherence to the Company’s code of conduct and/or code of ethics;
• ad-hoc reviews of other areas where there is a concern that affects financial reporting or a treat on the safeguarding of the Company’s assets;
• reviews of the compliance framework and specific compliance issues;
• follow-up visits to determine the status of management implementation of plans to address observations reported in preceding internal audits visits; and
• value added recommendations for more effective and efficient use of Company’s resources.

ix)    to consider any  related party transaction and conflict of interest situation that may arise within the Company and the Group including any transaction, procedure or course of  conduct that raises questions of management integrity;
x)    to consider other topics as defined by the Board.