The term and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with their terms of reference.

During the financial year ended 31 December 2003, six (6) Audit Committee meetings were held. Details of attendance of the members of the Audit Committee at the meetings held during the financial year ended 31 December 2003 are as follows:

The Company Secretary shall act as the secretary of Audit Committee. The Company Secretary is responsible to coordinate the administrative function in ensuring the meetings are being held accordingly. The Company Secretary shall also be responsible for keeping the minutes of the Audit Committee, and circulating them to the Committee members and to the other members of the Board, where applicable.

The Committee meets at least four (4) times a year.

At the request of the Chairman of Audit Committee, Executive Directors and other management staff will be invited to attend the Committee meetings or for selected agenda items. Representatives of the external auditors may also be invited. The Audit Committee Chairman shall report all matters discussed each meeting to the Board of Directors. In addition, the Committee shall regulate its own procedures, in particular, the calling of meetings, the notice to be given of such meetings, the voting and proceeding of such meetings, the keeping of minutes and the custody, production and inspection of such minutes.

The Board authorizes the Committee to investigate any activity within its terms of reference. It is authorized to seek any information it requires from any employee and all employees are directed to cooperate with any request made by the Committee. In addition, the Committee is authorized by the Board to obtain outside legal or other independent professional advice if it considers this necessary. The Committee always has the direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity.

The Committee shall be responsible for assisting the Board in fulfilling its fiduciary responsibility in areas relating to financial reporting matters and to the accounting and management controls of the Company and its subsidiaries. The duties of Audit Committee shall among others, include the following: -

1. To consider the appointment and removal of the external auditors, the audit fees and any questions of resignation or dismissal;

2. To discuss with the external auditors before the audit commences the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved and review the plan;

3. To review the quarterly and annual financial statements before submission to the Board;

4. To review with the internal and external auditors their audit report;

5. To review the effectiveness of management information and other systems of control within the Company;

6. To keep under review the effectiveness of the internal control systems;

7. To act in line with the directors of the Board of Directors; and

8. To report its findings on the financial and management performance and other material matters to the Board of Directors.

During the financial year 2003, the Audit Committee carried out the following activities in the discharge of its functions and duties:

1. Reviewed the quarterly unaudited financial results and Annual Report of the Group before recommending them for the Board’s approval.

2. Reviewed with the external auditors the results of the audit, the audit report and the management letter, including management’s response.

3. Discussed with the external auditors changes and developments on accounting practices and standards issued by the Malaysian Accounting Standards Board.

4. Reviewed the extent of the Group’s compliance with the provisions set out under the Malaysian Code of  corporate Governance for the purpose of preparing the Corporate Governance Statement and the Statement on Internal Control pursuant to the BMSB Listing Requirements.

5. Reviewed and discussed with the external consulting firm engaged to undertake the internal audit functions of the Group, the internal audit activities carried out during the year and their assessment, findings and recommendations on the system of internal controls and risk management.

6. Attended a briefing by the management on the proposed implementation of the Group’s Electronic Business website (E-Business) that will enable customers to place orders through the Internet.

The group has outsourced the internal audit function to Focus Internal Audit Solution, which reports to the Audit Committee and assists the Board of Directors in monitoring and managing risks and Internal Controls. The Audit Committee approves the internal audit plan during the Audit Committee meeting each year. The scope of Internal Audit covers the audits of all critical units of the operations, including its subsidiaries.

A numbers of minor internal control weaknesses were identified during the period, all of which have been, or being addressed. None of the issues warrant any further disclosure in the Group’s annual report. The group has introduced a risk-based approach to the implementation and monitoring of controls at the beginning of the period. The monitoring process also forms the basis for continually improving the risk management process in the context of the Group’s overall goals.