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Annual Report 2014 | S P SETIA BERHAD GROUP | 91

AUDIT COMMITTEE REPORT

iii.

To review the quarterly and year end financial statements before submission to the Board, focusing particularly on:

• any changes in accounting policies and practices;

• significant audit adjustments from the External Auditors;

• the going concern assumption; and

• compliance with accounting standards and other legal requirements.

iv.

To discuss problems and reservations arising from the interim and final audits and any matter the auditors may wish to discuss (in

the absence of management, where necessary).

v.

To review the External Auditors’ management letter and management’s response.

vi.

To do the following, in relation to the internal audit function:

• review the adequacy of the scope, functions and resources of the internal audit function, and that it has the necessary

authority to carry out its work;

• review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate

actions are taken on the recommendations of the internal audit function;

• review any appraisal or assessment of the performance of members of the internal audit function;

• approve any appointment or termination of senior staff members of the internal audit function; and

• take cognisance of resignations of internal audit staff members and provide the resigning staff member an opportunity to

submit reasons for resigning.

vii.

To review any related party transactions that may arise within the Company or Group.

viii. To consider other related matters, as defined by the Board.

Summary of Activities of The AC During The Year

The AC met four (4) times during the financial year ended 31 October 2014. The activities of the AC for the financial year were as follows:

(a)

Reviewed the quarterly financial results announcements and the year end financial statements of the Group prior to the Board’s approval,

focusing particularly on:

-

the overall performance of the Group;

-

the prospects for the Group;

-

the changes and implementation of major accounting policies and practices;

-

compliance with accounting standards and other legal requirement; and

-

financial impact from the implementation of the Goods and ServicesTax to the Group and provisions made in the financial statements

of the Group.

(b)

Discussed significant audit findings in respect of the financial statements of the Group for the financial year ended 31 October 2013 with

the External Auditors;

(c)

Reviewed the audit plan for the financial year ended 31 October 2014 with the External Auditors including audit fees.The AC also reviewed

the declaration of independence by the External Auditors in respect of the audit for the financial year ended 31 October 2014.

(d)

Reviewed the reports prepared by the Internal Auditors on the state of internal control of the Group;

(e)

Reviewed the related party transactions entered into by the Company and the Group; and

(f)

Met with the External Auditors twice without the presence of Executive Board members and management.

IV. Corporate Governance