FGV Annual Integrated Report 2019

99 ANNUAL INTEGRATED REPORT 2019 04 S E C T I O N GOVERNANCE AT FGV: ACCOUNTABILITY AUDIT COMMITTEE REPORT KEY MATTERS REPORTED TO THE BOARD The Chairman of the Audit Committee updated the Board on matters deemed to be of major importance deliberated at the Audit Committee meetings and its recommendations. The copies of confirmed minutes of each of the Audit Committee meetings were also circulated to the Board for noting at the next practicable Board meeting. Among the significant matters considered by the Audit Committee during the year 2019 were the following: HOW WE ARE GOVERNED Significant matters How these matters were addressed by the Audit Committee Financial Reporting • Reviewed the quarterly financial results and year-end Financial Statements of FGV and the Group, focusing particularly on changes in financial reporting standards including assessing their impacts on the Financial Statements, reasons for fluctuations between periods, explanations for achievement of budgets, forecasts and matters requiring Management’s judgement, especially assets recoverability, accounting practices, unusual events and significant adjustments. MSM’s Financial Covenants • Reviewed the status of the covenants based on every quarterly results and the financial position of MSM. Advised Management to assist MSM to renegotiate and restructure its loans. Liability under the Land Lease Agreement (LLA) • Assessed the rationale for the LLA adjustments and any changes in the basis of calculation of LLA liability resulting in charges and write-backs in the Profit and Loss Accounts to ensure the volatility of the LLA charge is managed effectively by Management. Performance of Joint Ventures • Reviewed the performance of joint ventures participated by FGV, including deliberating on Management’s plans on loss making joint ventures that are hampering FGV’s performance, and including any support required for the venture. Where there are no plans, Management was advised to divest FGV’s shareholdings in the loss making ventures. Group Financial Policies • Reviewed and recommended to the Board the implementation of the Group’s Limit of Authorities in place of the now-defunct Delegation of Authority. Internal Control • Provided direction for internal control improvements on matters reported by the Group Internal Audit. Encouraged management to prioritise the improvements based on the observations reported in the Group Internal Audit reports. Recurrent Related Party Transactions • Considered whether the Recurrent Related Party Transactions were undertaken at commercial arms-length terms in accordance with established procedures and within the mandate provided by the shareholders.