FGV Annual Report 2017

FELDA GLOBAL VENTURES HOLDINGS BERHAD HOW WE ARE GOVERNED 84 GOVERNANCE AT FGV: ACCOUNTABILITY AUDIT COMMITTEE REPORT The purpose of the Audit Committee is to assist the Board in fulfilling the following key responsibilities: • Assessing the risks and control environment; • Overseeing financial reporting; • Evaluating the internal and external audit process and outcome; • Reviewing conflict of interest situations and related party transactions; • Providing oversight on the Annual Integrated Report; and • Undertaking any such other functions as may be determined by the Board from time to time. The existence of the Audit Committee does not diminish the Board's ultimate statutory and fiduciary responsibility for decision-making relating to the functions and duties of the Audit Committee. The Audit Committee may empower one or more of its members to meet or communicate with the external auditors and/or internal auditors independently. The full details of the Audit Committee’s Terms of Reference are published on our website, www.feldaglobal.com . SUMMARY OF WORK OF THE AUDIT COMMITTEE Through the nine meetings held and various private sessions with the external auditors, internal auditors and Management, the Audit Committee undertook the following principal activities in discharging its responsibilities: Assessment of the risks and control environment a. Evaluated the reports on the assessment of the risk and control environment based on the external auditors’ quarterly financial information review at each quarter and statutory financial audit at year end. b. Reviewed seven reports from the Chief Internal Auditor summarising the main observations from the internal audit reports issued, which included information relevant for the assessment of the risks and control environment. c. Considered the overall rating of the internal audit reports issued in 2016 as reflection of the overall effectiveness of the system of internal control vis-à-vis the risks, control environment and compliance requirements of the Group. d. Received assurances from the GP/CEO and the GCFO that the risk management and internal control system of the Group for the financial year 2016 have been operating adequately and effectively, in all material respects. At each of its meetings, the Audit Committee has given guidance which was relevant for the improvement of the risks and control environment of the Group, in particular in the areas of commodities trading, receivables management, procurement management and plantation operations, which were the main challenges to the Group during the financial year. Overseeing financial reporting a. Reviewed reports of the external auditors from their quarterly financial information review and annual statutory financial audit at each meeting. Amongst the main focus of the reports were the external auditors' assessments of impairment and provision exposures of various assets, investments and onerous contracts based on applicable financial reporting standard. b. Met with the external auditors in two private sessions during the financial year without the presence of Management on 28 August 2017 and 16 November 2017. In these sessions, the following matters were discussed, amongst others: • Monitoring activities of the practices in refined sugar sales. • CPO trading of the Group. • Stability of several key systems affecting accounting and financial reporting. • Investment impairment assessment. • Enhancement of acquisition undertakings. • Monitoring of covenants imposed on the Group. • Expediting the accounting closing process to meet shorter deadlines.