Bursa Malaysia Annual Report 2015

GOVERNANCE

Bursa Malaysia •

Annual Report 2015

5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1 Compliance with applicable financial reporting standards

The Board recognises the importance of providing shareholders

with a balanced and clear assessment of the Group’s financial

performance, including its position and future prospects. Hence,

the Board provides shareholders with quarterly and Annual

Audited Financial Statements as well as corporate

announcements on significant developments affecting the

Company in accordance with the MMLR.

The AC Chairman Mr. Pushpanathan a/l S.A. Kanagarayar

, a

member of three professional accounting organisations, together

with AC members all of whom are financially literate, reviewed

the Company’s financial statements in the presence of both

external and internal auditors, prior to recommending them for

approval by the Board and issuance to stakeholders. The AC met

on a quarterly basis and carried out their duties in accordance

with the TOR.

The Director of Corporate Services/Chief Financial Officer (“CFO”)

formally presented to the AC and the Board details of revenue

and expenditure in the form of charts, for review of quarter-

to-quarter and year-to-date financial performance against

budget. The Chairman’s Message, the CEO’s Message, and the

Management Discussion and Analysis of this Annual Report all

provide additional analysis and commentary on the Group’s

financial performance.

As part of the governance process in reviewing the quarterly and

yearly financial statements by the AC, the CFO provided assurance

to the AC on a quarterly basis that appropriate accounting policies

had been adopted and applied consistently; that the going

concern basis applied in the Condensed Consolidated Financial

Statements (“CCFS”) and Annual Financial Statements was

appropriate; that prudent judgements and reasonable estimates

had been made in accordance with the requirements set out

in the Malaysian Financial Reporting Standards (“MFRSs”) and

the International Financial Reporting Standards (“IFRSs”); that

adequate processes and controls were in place for effective and

efficient financial reporting and disclosures under the MFRSs,

IFRSs and MMLR; and that the CCFS and Annual Financial

Statements did not contain material misstatement and gave a

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

respective companies within the Group for 2015.

In addition, Bursa Malaysia has an in-house internal audit

function within the Group, where the Head of GIA, who reports

directly to the AC, undertook an independent assessment on the

internal control system on a quarterly basis and assured the AC

that no material issue or major deficiency had been noted which

would pose a high risk to the overall system of internal control

under review.

5.2 Assessment of suitability and independence of external

auditors

The AC had in January 2016 deliberated the outcome of the

Request for Proposal evaluations, which included an assessment

of the engagement teams’ qualifications, credentials and

experience, particularly in the financial services sector, the firms’

competitive advantage with global network resources, their

audit work approach, and their ability to provide value added

advice and services, as well as to perform the work within Bursa

Malaysia’s timeline. The AC then decided to recommend for the

Board’s approval the appointment of Messrs. Ernst & Young

(“EY”) as external auditors of Bursa Malaysia for the FY ending

31 December 2016.

At the same time, the AC further undertook an annual assessment

of the quality of audit which encompassed the performance of the

external auditors EY, and the quality of their communications with

the AC and Bursa Malaysia Group, based on feedback obtained

via assessment questionnaires from Bursa Malaysia personnel

who had substantial contact with the external audit team and

EY throughout the year. The AC also took into account the

openness in communication and interaction with the lead audit

engagement partner and engagement team through discussions

at private meetings, which demonstrated their independence,

objectivity and professionalism. The activities relating to the

external auditors and the lead audit engagement partner are

provided in the AC Report of this Annual Report.

The AC was satisfied with the suitability of EY based on the

quality of services and sufficiency of resources they provided

to the Group, in terms of the firm and the professional staff

assigned to the audit. The AC was also satisfied in its review

that the provision of non-audit services by EY to the Company

for the FY 2015 did not in any way impair their objectivity and

independence as external auditors of Bursa Malaysia.

Having regard to the outcome of the evaluations and the annual

assessment of external auditors which supported the AC’s

recommendation, the Board had in February 2016 approved

the AC’s recommendation for the shareholders’ approval to be

sought at the 39

AGM on the appointment of EY as external

auditors of the Company for the FY 2016.

CORPORATE GOVERNANCE

STATEMENT

25 Mr. Pushpanathan a/l S.A. Kanagarayar’s profile is set out in the Board of Directors’ Profiles of this Annual Report.