Bursa Malaysia Annual Report 2014

GOVERNANCE

Bursa Malaysia

•

Annual Report 2014

The quarterly financial statements for the first, second and third

quarters of 2014, which were prepared in compliance with the

Malaysian Financial Reporting Standard (MFRS) 134

Interim Financial

Reporting

, International Accounting Standard 34

Interim Financial

Reporting

and paragraph 9.22, including Appendix 9B of the MMLR,

were reviewed at the AC meetings on 14 April 2014, 14 July 2014 and

16 October 2014 respectively.

On 26 January 2015, the AC reviewed the quarterly financial

statements for the fourth quarter of 2014 and the annual audited

financial statements for 2014.

The AC’s recommendations were presented for approval at the

subsequent Board meetings.

b. To safeguard the integrity of information, the Director of Corporate

Services who is also the Chief Financial Officer (CFO) had, on 10 April

2014, 10 July 2014, 10 October 2014 and 21 January 2015, given

assurance to the AC that:

• Appropriate accounting policies had been adopted and applied

consistently;

• The going concern basis applied in the Annual Financial

Statements and Condensed Consolidated Financial Statements

was appropriate;

• Prudent judgements and reasonable estimates had been made

in accordance with the requirements set out in the Malaysian

Financial Reporting Standards (MFRSs);

• Adequate processes and controls were in place for effective and

efficient financial reporting and disclosures under the MFRSs,

International Financial Reporting Standards and MMLR; and

• The Annual Financial Statements and Condensed Consolidated

Financial Statements did not contain material misstatements and

gave a true and fair view of the financial position of the Group and

the respective companies within the Group for 2014.

On 27 January 2014, the previous CFO sought the AC’s approval for the

proposed audit and non-audit services to be provided by the External

Auditors for 2014 (Annual Plan 2014) in accordance with the Auditor

Independence Policy.

2. External Audit

The AC deliberated the External Auditors’ report at its meeting on 27

January 2014 with regard to the relevant disclosures in the annual

audited financial statements for 2013. The AC also considered

suggestions to improve the accounting procedures and internal control

measures.

b. On 27 January 2014, the AC reviewed the list of services in the Annual

Plan 2014 which comprised the audit services as well as non-recurring

and recurring non-audit services that may be provided by the External

Auditors. The non-recurring non-audit services that were expected to

be utilised in 2014 were ad-hoc accounting and tax advisory services

including that on Goods and Services Tax (GST) implementation.

The recurring non-audit services were in respect of tax compliance,

AUDIT COMMITTEE REPORT

services as scrutineers at Bursa Malaysia’s AGM, the annual review of

the Statement on Internal Control and Risk Management and limited

reviews of quarterly financial statements. In considering the nature

and scope of non-audit fees, the AC was satisfied that they were not

likely to create any conflicts of interest nor impair the independence

and objectivity of the External Auditors.

Bursa Malaysia's Auditor Independence Policy states that the lead

audit engagement and concurring partners of Bursa Malaysia Group

be subject to a five-year rotation with a five-year cooling-off period.

Mr. Chan Hooi Lam became the lead audit engagement partner in 2010

and will be rotated in 2015, while Mr. Abraham Verghese became the

audit concurring partner on 1 October 2014, replacing Ms. Gloria Goh

who retired as a partner on 30 September 2014.

In this respect, the AC carries out an annual review of the performance

of the External Auditors, including assessment of their independence

in performing their obligations. Based on the annual evaluation of their

performance and audit fees, the AC was satisfied with the External

Auditors’ technical competency and independence for 2014. With that,

the AC further recommended to the Board the reappointment of the

External Auditors for 2014.

d. On 16 October 2014, the AC reviewed the External Auditors’ 2014

Audit Plan outlining their scope of work and proposed fees for the

statutory audit and review of the Statement of Internal Control and

Risk Management for 2014. The AC further resolved to recommend the

proposed fees to the Board for approval.

On 26 January 2015, the CFO presented that non-audit fees incurred

in 2014 amounted to RM289,100, constituting approximately 49% of

the total remuneration of RM587,100 to the External Auditors for the

2014 financial year. At the same meeting, the CFO also presented for

the AC’s review the list of services in the Annual Plan 2015.

On 26 January 2015, the AC undertook an annual assessment of the

suitability and independence of the External Auditors in accordance

with the Auditor Independence Policy of the Group which was

adopted in 2006. In its assessment, the AC considered several factors

including the adequacy of experience and resources of the firm and

the professional staff assigned to the audit, and the level of non-audit

services to be rendered by the External Auditors to the Group for the

2015 financial year.

In accordance with the Auditor Independence Policy which requires

the lead audit partner to be subject to a five-year rotation with a five-

year cooling-off period, the AC conducted a further review on EY and

assessed the performance of the external audit function, to determine

whether to maintain the incumbent audit firm or to appoint a new one.

Feedback on the conduct of the external audit was obtained from the

Management for assessing the quality of services rendered to the

Group.

The External Auditors provided written assurance on 26 January 2015

to the AC that in accordance with the terms of all relevant professional

and regulatory requirements, they had been independent throughout

the audit engagement for 2014.