FGV Annual Report 2018

REINFORCED OUR STANDARDS OF GOVERNANCE 01 02 05 03 07 06 04 08 09 81 ANNUAL INTEGRATED REPORT 2018 GOVERNANCE AT FGV: ACCOUNTABILITY AUDIT COMMITTEE REPORT Audit Partner Rotation FGV has adopted the latest ruling of the MIA on audit partner rotation which allows rotation of the lead and signing partner every seven years, updating the earlier FGV policy of five years. 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 consecutive years. The current lead and signing partner of PwC has been assigned to the Group for five years since the annual audit of the statutory Financial Statements for FY2014. With adoption of the latest ruling by the MIA, the Audit Committee has agreed to extend the current PwC lead and signing partner for FGV for another two years. 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 the Group Audit Plan on an annual basis by the third quarter of every financial year. A 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. Removal of External Auditor In the event of any removal or resignationof the external auditor, the Audit Committee shall consider the request and reason for the removal or resignation to make its recommendation to the Board. 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. From assessment conducted by the Audit Committee on PwC’s performance in FY2018, the Audit Committee has concluded that PwC remains suitable for appointment as external auditor and recommend their re-appointment for FY2019. 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. Fees paid/payable to PwC in 2018 RM ’000 Audit Fees • PwC Malaysia • Member firms of PwC International Limited (PwCIL) 4,401 1,423 Audit Related Fees • PwC Malaysia and member firms of PwCIL 1,501 Other non-audit fees paid to PwC Malaysia and member firms of PwCIL 54 Total 7,379 During the FY2018, the non-audit fees were within the allowable threshold. The fees paid/payable to the external auditor, PwC, in financial year 2018 were as follows: