FGV Annual Report 2017

FELDA GLOBAL VENTURES HOLDINGS BERHAD HOW WE ARE GOVERNED 88 AUDIT COMMITTEE REPORT GOVERNANCE AT FGV: ACCOUNTABILITY Audit Partner Rotation The External Auditor Policy requires rotation of the lead and signing partner every five years and when rotated off the audit, the partner shall not be a member of the engagement team or be a key audit partner on the engagement for two years. The current lead and signing partner of PwC has only been assigned to the Group for four years since the annual audit of the statutory Financial Statements for the FYE 2014. Audit delivery and reporting Upon approval of the audit fees by the Board, the external auditor's engagement letter shall be signed by the GCFO. 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 months or as and when the total of non-audit service fees exceed the 25% threshold. The fees paid/payable to the external auditor, PwC, in financial year 2017 were as follows: Fees paid/payable to PwC in 2017 RM’ 000 Audit Fees • PwC Malaysia • Member firms of PwC International Limited (PwCIL) 4,327 1,704 Audit Related Fees • PwC Malaysia and member firms of PwCIL 1,454 Other non-audit fees paid to PwC Malaysia and member firms of PwCIL 231 Total 7,716 During the financial year 2017, the non-audit fees was within the allowable 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 firms 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 auditor updates the Audit Committee members on changes to accounting standards and issues related to financial reporting through quarterly meetings.