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salcon berhad

Audit Committee Report

Trainings

During the year, the Committee members have attended the following training programmes, collectively or

individually:

1.

6th Tricor Tax & Corporate Seminar

2.

The National Water & Utilities Summit 2010

Summary of Activities of the Committee

The activities carried out by the Committee during the financial year ended 31 December 2010 include, inter

alia with particular attention paid to overseas operations, the following:

·

Reviewed the External Auditors' scope of work and audit plans for the year, prior to the commencement

of their annual audit.

·

Considered and recommended to the Board for approval, the audit fees payable to the External Auditors

as disclosed in Note 21 to the financial statements.

·

Reviewed with the External Auditors, the results of the audit and major issues arising from the audit.

·

Reviewed the Company's quarterly results and financial statements prior to submission to the Board.

·

Reviewed the Company's compliance in particular the quarterly and year-end financial statements with

the Bursa Securities Main LR, Malaysian Accounting Standards Board (MASB) and other relevant legal and

regulatory requirements.

·

Reviewed the Internal Audit & Risk Management Department's resource requirements, performance

appraisals, programs and plans for the financial year under review as well as the plans for the financial

year ending 31 December 2011.

·

Reviewed the Summary of Pertinent Issues presented by the Internal Auditor on major findings,

recommendations and management's responses. The Committee also discussed management actions

taken to improve the system of internal control based on improvement opportunities identified in the

summary report.

·

Reviewed pertinent issues of the Group which had a significant impact on the results of the Group which

included enhancement and further investment in existing products and services offered, cost rationalization

measures, reorganization of business units and human resource development.

·

Reviewed the Internal Control Statement and Audit Committee Report and its recommendation to the

Board for inclusion in the Annual Report.

·

Reviewed the application of corporate governance principles and the extent of the Group's compliance

with the best practices set out under the Code for the purpose of preparing the Internal Control Statement

and Corporate Governance Statement pursuant to Bursa Securities Main LR.

·

Reviewed the verification exercise conducted by the Internal Auditor on the Employee Share Option

Scheme (ESOS) allocation for the financial year ended 31 December 2010 to ensure compliance with the

criteria as approved and disclosed by the ESOS Committee.