FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 114 HOW WE ARE GOVERNED Audit delivery and reporting Upon approval of the audit fees by the Board, the external auditor's engagement letter shall be signed by the Group CFO The deliverables and reports from the audit of the statutory financial statements shall be communicated and agreed upon through Group Audit Plan on annual basis by the third quarter of every financial year. Management representation letter shall be issued to the external auditor upon completion of the statutory audit for each company under the Group. Engagement of external auditor for non-audit services The external auditor may be engaged to perform permitted audit or non-audit services as detailed in the External Auditor Policy provided the engagement does not impair independence of the external auditor in its audit of the statutory financial statements. The External Auditor Policy also specifies prohibited non-audit services which the external auditor shall not be engaged for. All services to be awarded to the external auditor shall be subjected to independence assessment and monitoring. The engagement of permitted non-audit services shall be reviewed and approved by the Audit Committee where the annual fees for non-audit services exceed 25% of the annual fee for audit of the statutory Financial Statements of the Group. A report on the engagement of the external auditor for all other audit and non-audit services together with the fees for each engagement shall be reported to the Audit Committee every six (6) months or as and when the total of non-audit service fees exceed the 25% threshold. Removal of external auditor The Audit Committee shall recommend to the Board the termination of the external auditor after considering the request and reason for removal or resignation of the external auditor. The selection of new external auditor shall be conducted through invitation of a closed tender procurement process of the other Top Three accounting through the Group's normal procurement policies and procedures. The termination shall be approved by the FGV Shareholders at the Annual General Meeting together with the proposal for the appointment of a new external auditor. Keeping updated on relevant information The external auditors updates the Audit Committee members on changes to accounting standards and issues related to financial reporting through quarterly meetings. GROUP INTERNAL AUDIT The Group has an in-house Group Internal Audit ("GIA") function, which is independent and reports functionally direct to the Audit Committee and administratively to the GP/CEO. The conduct of GIA is based on a Group Internal Audit Charter, which is established consistent with the requirements of the Institute of Internal Auditors' International Standards for the Professional Practise of Internal Auditing and approved by the Audit Committee as affirmed through a Quality Assurance Review conducted by the Institute of Internal Auditors Malaysia in 2014. The fees paid/payable to the external auditor, PwC, in financial year 2016 were as follows: Fees paid/payable to PwC in 2016 RM' 000 Audit Fees • PwC Malaysia • Member firms of PwC International Limited (PwCIL) 4,280 1,627 Audit Related Fees • PwC Malaysia and member firms of PwCIL 1,441 Other non-audit fees paid to PwC Malaysia and member firms of PwCIL 704 Total 8,052 During the financial year 2016, the non-audit fees was within the allowable threshold. CORPORATE GOVERNANCE STATEMENT