The Audit and Risk Committee assists the Board in fulfilling its oversight of the quality and integrity of the accounting, auditing, reporting, and financial control practices, as well as risk management of the Company.

The Audit and Risk Committee is responsible to review the following major matters:

• Financial reports;
• Auditing and accounting policies and procedures; 
• Internal control systems and related policies and procedures; 
• Material asset or derivatives transactions; 
• Material lending funds, endorsements or guarantees; 
• Offering or issuance of any equity-type securities; 
• Derivatives and cash investments; 
• Legal compliance; 
• Related-party transactions and potential conflicts of interests involving executive officers and directors; 
• Ombudsman reports; 
• Fraud prevention and investigation reports; 
• Corporate information security; 
• Corporate risk management; 
• Performance, independence, qualification of independent auditor; 
• Hiring or dismissal of an attesting CPA, or the compensation given thereto; 
• Appointment or discharge of financial, accounting, or internal auditing officers; 
• Assessment of Committee Charter and fulfillment of Committee duties;
• Self-assessment of the Committee’s performance; and
• Any other matters that shall be reviewed by the Audit and Risk Committee Meeting as required by relevant laws and regulations or its Committee Charter, or that are deemed to be material by the regulatory authorities.

Under R.O.C. law, the membership of audit committee shall consist of all independent directors. TSMC’s Audit and Risk Committee satisfies this statutory requirement. The Committee also engaged a financial expert consultant in accordance with the rules of the U.S. Securities and Exchange Commission. The Audit and Risk Committee annually conducts self-evaluation to assess the Committee’s performance and identify areas for further attention.

TSMC’s Audit and Risk Committee is empowered by its Charter to conduct any study or investigation it deems appropriate to fulfill its responsibilities. It has direct access to TSMC’s internal auditors, the Company’s independent auditors, and all employees of the Company. The Committee is authorized to retain and oversee special legal, accounting, or other consultants as it deems appropriate to fulfill its mandate.

Audit and Risk Committee Members’ Professional Qualifications and Experiences

Please refer to Directors' Biographies.

Audit and Risk Committee Meeting Status in 2024

Tenures of the Audit and Risk Committee members are from June 4, 2024 to June 3, 2027. The Chairman of the Audit and Risk Committee, convened four regular meetings and one special meeting in 2024. In addition to these meetings, he also convened one special meeting and three telephone conferences to review the Company’s Annual Report to be filed with the Taiwan and U.S. authorities and investor conference materials. The Committee members’ and consultant’s attendance status is as follows.

Annotations:
A.    (1) Resolutions related to Securities and Exchange Act §14-5:

Independent directors’ objections, reservations or major suggestions: None.

Resolution of the committee and the Company’s response to the committee’s opinion: The members of the Committee unanimously approved all the resolutions, and the Board of Directors approved all such resolutions recommended by the Committee.

　　(2) There were no other resolutions which was not approved by the Committee but was approved by two thirds or more of all directors in 2024.

B.    Recusals of Independent Directors due to conflicts of interests: Mr. Moshe N. Gavrielov, serving as a Director of NXP Semiconductors N.V. (NXP), recused himself from participating in the discussion and voting on the proposal regarding TSMC’s subscription to new shares to be issued by VIS for financing a joint venture 12-inch wafer fab with NXP.

Note: Sir Peter L. Bonfield, Mr. Michael R. Splinter, Mr. Moshe N. Gavrielov, Dr. L. Rafael Reif, Ms. Ursula M. Burns, Ms. Lynn L. Elsenhans and Dr. Chuan Lin were elected as TSMC’s independent director at Annual Shareholders’ Meeting on June 4, 2024, and became member of the Audit and Risk Committee.

Descriptions of Independent Directors’ Communications with the Internal Auditors and the Independent Auditors in 2024

These Closed Door Sessions relate to corporate finance and operations matters, and are between the Independent Directors and the Internal Auditors or the Independent Auditors. The communication principles are as follows,

1. The internal auditors have sent the audit reports to the members of the Committee periodically and presented the findings of all audit reports in the quarterly meetings of the Committee. The head of Internal Audit will immediately report to the members of the Committee any material matters. During 2024, the head of Internal Audit did not report any such material matters. The communication channel between the Committee and the internal auditor functioned well.
2. The Company’s independent auditors have presented the findings of their quarterly review or audits on the Company’s financial results. Under applicable laws and regulations, the independent auditors are also required to immediately communicate to the Committee any material matters that they have discovered. During 2024, the Company’s independent auditors did not report any irregularity. The communication channel between the Committee and the independent auditors functioned well.

The Communications between the Independent Directors and the Internal Auditors or the Independent Auditors

Result: all of the above matters were reviewed and/or approved by the Committee whereupon Independent Directors raised no objection.