Audit Committee Report

1. Financial Reporting

1. In overseeing Bursa Malaysia's financial reporting, the AC reviewed the quarterly financial statements for the fourth quarter of FY2009 and the annual audited financial statements for FY2009 at its meeting on 2 February 2010. The quarterly financial statements for the first, second and third quarters of FY2010 were reviewed at the AC meetings on 19 April 2010, 14 July 2010 and 18 October 2010 respectively. On 26 January 2011, the AC reviewed the quarterly financial statements for the fourth quarter of FY2010 and the annual audited financial statements for FY2010. The AC's recommendations were presented to the respective subsequent Board meetings for approval.
   
   

2. External Audit

1. The AC deliberated the External Auditor's report at its meeting on 2 February 2010 with regard to the relevant disclosures in the annual audited financial statements for FY2009. The AC also considered suggestions for improvement in the accounting procedures and internal control measures.
2. The AC reviewed the External Auditor's Annual Plan 2010, including the non-recurring non-audit services and corresponding fees for FY2010 at its meeting on 2 February 2010 and was satisfied that the services provided by the External Auditor did not impair its audit independence. Among the non-recurring non-audit services provided by the External Auditor for FY2010 were technical advice on strategic projects, review of transfer pricing documentation, advice on FRS 139 and FRS 7, Islamic securities selling and buying, ad-hoc tax advisory fees and Goods and Services Tax implementation.
   
   The AC was also satisfied with the External Auditor's technical competency, based on its annual evaluation of their performance, and with the reasonableness of audit fees. With that, the AC further recommended for the Board's approval their appointment as External Auditors in respect of FY2010.
3. On 18 October 2010, the AC reviewed the External Auditors' Audit Planning Memorandum comprising their scope of work and proposed fees for the statutory audit and review of the Internal Control Statement for FY2010. The proposed fees were recommended by the AC to the Board for approval on 19 October 2010.
4. On 26 January 2011, the performance of the external audit function was reviewed and assessed based on agreed performance criteria as set out in the External Auditors' Audit Planning Memorandum for FY2010. Feedback on the conduct of the external audit was obtained from the management. The AC was satisfied with the performance of the External Auditors and with that, recommended reappointment of the External Auditors for FY2011.

3. Internal Audit

1. The GIA conducted the audit activities as planned in the 2010 Audit Plan which was approved by the AC on 23 November 2009. The Acting Head of Group IA presented to the AC at every AC meeting the Group IA's reports on the status and progress of IA assignments, including a summary of audit reports issued, audit recommendations provided by Internal Auditors and management's response to those recommendations. Non-audit assignments were also presented covering the evaluation of system readiness on key system development projects such as hosting of Bursa Malaysia Derivatives products on the CME Globex® electronic trading platform, the post-implementation review of projects such as BTS and ETP, tender evaluation and the monitoring of employees' dealings in securities.
2. At the meeting on 2 February 2010, the AC deliberated on the results of the Head of Group IA's 2009 Balanced Scorecard and KPIs. The GIA's 2010 Balanced Scorecard and KPIs were considered and approved on 19 April 2010.
3. At the meeting on 19 April 2010, the AC reviewed the results of Group IA's Customer Satisfaction Survey for 2009 which included an analysis of IA's strengths and weaknesses and action plans to improve audit services to IA's customers. Overall, the results indicated that IA's customers were generally satisfied with the performance of the IA function.
4. On 19 April 2010, the Acting Head of Group IA presented the post-mortem report for the Annual IA Plan of 2009 which provided an overall indication of the adequacy and effectiveness of controls implemented.
5. At the meeting on 23 November 2010, the AC considered the adequacy of scope and comprehensive coverage of the Group's activities, and approved the IA's Annual Audit Plan for 2011.
6. On 23 November 2010, the AC reviewed the annual Internal Control Statement and the Risk Management Statement to be published in the Annual Report.

1. Performing operational audits on the following areas:

1. Core Business and Support Services functions of the Group;
2. Quarterly stock count of CDS scrip maintained by Bursa Malaysia Depository;
3. System administration and support; and
4. Reviewing compliance with the Group's Guidelines on Handling COI, where conflict may exist between the interest of the Group and the proper performance of its regulatory duties.

2. Performing IS and IT audits on the following areas:

1. Facilities management functions supporting the core application systems of the Group;
2. IT project management of the Group;
3. Systems development and maintenance of core application systems of the Group; and
4. IT related functions supported by third party vendors.

3. Providing assurance and performing compliance review for:

1. Tenders and significant procurement exercises;
2. System Readiness Review on key system development projects and post-implementation of the projects;
3. Monitoring employees' compliance with the Securities Transaction Policy; and
4. Undertaking investigations into any suspicion of fraud or reported operational failures within the Group.