Fraser & Neave Holdings Bhd Annual Report 2019

A N N U A L R E P O R T 2 0 1 9 04 Governance 111 Apart from conducting the annual statutory audit, the auditors were also appointed to review the Condensed Interim Financial Statements for the first three quarters of the financial year ended 30 September 2019 in accordance with the relevant Malaysian Financial Reporting Standards and Bursa Securities Listing Requirements. Through the statutory audit and the quarterly reviews, the Audit Committee regularly engages with the auditors, including at least one meeting without the presence of management, to ensure that the reviews and audits were robust, effective and consistent with professional auditing standards. During the financial year 2019, the Audit Committee had one meeting with the auditors without the presence of management. The Audit Committee reports that there was no significant matter of disagreement between the auditors and management. To reinforce the independence and objectivity of the auditors, the Audit Committee was apprised of all non-audit services that the auditors may be called upon to perform. This was so in those circumstances where the auditors were best qualified and suitable to provide the required services given their comprehensive knowledge of the Group’s business operations, systems and processes. During the financial year, the amount incurred in respect of non- audit related fees amounted to RM284,000 (FY2018 RM220,000) and comprised the following assignments: • Quarterly Reviews; • Review of Statement on Risk Management and Internal Control; and • Update of Transfer Pricing Documentation for a subsidiary. Other activities by the Audit Committee included a review and discussion of the annual audit plan to ensure that time allocated to audit the areas of high risks as highlighted in the Group’s risk matrices are adequately dealt with and the level of resources and experiences assigned to the examination were appropriate. Consistent with its examination, the external auditors performed audit procedures to obtain reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. They reported that they did not note any instance indicating existence of fraud that might result in a material misstatement in the financial statements. The external auditors performed a limited assurance review of the Statement on Risk Management and Internal Control as required under the Bursa Securities Listing Requirements. GROUP INTERNAL AUDIT Group Internal Audit activities were performed by a team of six professional internal auditors, supervised by the Deputy Head and the Head of Group Internal Audit from its parent company, Fraser and Neave, Limited (“F&NL”). The Head of Group Internal Audit is a Chartered Accountant of Singapore and an appointed member of the Board of Governors of the Institute of Internal Auditors, Singapore. Some of the internal audit staff are also members of the Institute of Internal Auditors, Malaysia. The Group has recruited the Head, Internal Audit who had joined on 17 September 2019. Following the appointment, the Head, Internal Audit would take over the internal audit function from the Head of Group Internal Audit, F&NL. The Head, Internal Audit is a Certified Practicing Accountant (CPA Australia). In accordance with the F&NHB IA Charter, Group Internal Audit had maintained its independence and objectivity in carrying out its assurance activity. Group Internal Audit did not have any direct operational responsibility or authority over any of the activities it audited or had engaged in any activity that might impair the internal auditor’s judgment. All the internal audit staff had confirmed via an annual declaration that they were free from any relationships or conflict of interests which could impair their objectivity and independence. Group Internal Audit had adopted and complied with the International Standards for the Professional Practice of Internal Auditing (“IIA Standards”) issued by the International Internal Audit Standards Board. The Department maintained a quality assurance and improvement programme to evaluate the internal audit activity’s conformance with the IIA Standards and the Code of Ethics. The quality assurance and improvement programme included both internal self- assessment (performed once every two years) and an external assessment conducted by a qualified independent consulting firm, appointed once in five years. The Audit Committee continually evaluated the Group Internal Audit function to ensure its activities are performed independently and with impartiality and due professional care. The annual internal audit plan was approved by the Audit Committee to ascertain the extent of its scope and coverage of the Group’s activities, including the adequacy of Group Internal Audit’s staffing strategies in supporting the plan’s completion. Following the completion of audit reviews conducted, the audit reports and the corresponding key findings, audit recommendations and agreed action plans taken by Management were deliberated upon by the Audit Committee. In accordance with the annual internal audit plan which had been approved by the Audit Committee, Group Internal Audit conducted regular reviews of the governance and internal controls processes within the Group. The audits were performed using a risk based approach and is consistent with the Group’s established framework in designing, implementing and monitoring of its control systems. Group Internal Audit had regular interactions with the Chairman of the Audit Committee, Senior Management and including the external auditors and Risk Management when necessary.