CORPORATE
GOVERNANCE
37
GDS Global Limited Annual Report 2015
The principal activities of the AC during the financial year are summarised below:
Financial reporting
The AC met on a bi-annual basis and reviewed the half-year and full year announcements, material
announcements and all related disclosures to the shareholders before submission to the Board for
approval. In the process, the AC reviewed the audit plan and audit committee report presented by the
external auditors.
The AC reviewed the annual financial statements and also discussed with management, the CFO and the
external auditors the significant accounting policies, judgements and estimates applied by management
in preparing the annual financial statements. The AC focused particularly on:
Significant adjustments resulting from the audit;
The appropriateness of the going concern assumption in the preparation of the financial
statements; and
Significant deficiencies in internal controls over financial reporting matters that came to the external
auditors’ attention during their audit together with their recommendations.
Following the review and discussions, the AC then recommended to the Board for approval of the
audited annual financial statements.
External audit processes
The AC manages the relationship with the Group’s external auditors on behalf of the Board. The AC is
of the view that the external auditors demonstrated appropriate qualifications and expertise. It is also
satisfied with the adequacy of the scope and quality of the external audits being conducted by Deloitte
& Touche LLP. Therefore, the AC recommended to the Board that Deloitte & Touche LLP be re-appointed
as the external auditors. The Board accepted this recommendation and has proposed a resolution to
shareholders for the re-appointment of Deloitte & Touche LLP at the forthcoming AGM.
Pursuant to the requirement in the Listing Manual, an audit partner may only be in charge of a maximum
of five consecutive annual audits and may then return after two years. The current Deloitte & Touche LLP’s
audit partner for the Company was appointed on 22 April 2014. In appointing auditors for the Company
and its subsidiaries, the Group has complied with Rules 712 and 715 of the Listing Manual.
Auditors’ independence
In order to maintain the independence of the external auditors, the Group has specific policy which
governs the conduct of non-audit work performed by the external auditors. This policy prohibits the
external auditors from:
Performing services which would result in the auditing of their own work;
Participating in activities normally undertaken by management;
Acting as advocate for the Group; or
Creating a mutuality of interest between the external auditors and the Group, for example being
remunerated through a success fee structure.
