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27
annual report 2011
Corporate
Governance Report
Audit Committee
Principle 11: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and
duties.
The AC comprises the three Independent Directors, Mr Lee Hock Lye, Mr Prabhakaran Narayanan Nair and Mr Wong Ah Long. The Chairman of
the AC is Mr Lee Hock Lye.
Mr Lee Hock Lye is a retired banker and an Associate of the Chartered Institute of Bankers, UK and is a member of the Singapore Institute of
Directors and Audit Committee Institute, Singapore. Mr Lee graduated with a Bachelor of Social Sciences (Honours) degree in Economics from the
University of Singapore. Mr Lee is also an Independent Non-Executive Director at RH Petrogas Limited and Business Advisor at Lombard Odier Darier
Hentsch, Singapore. Mr Prabhakaran Narayanan Nair is an Advocate and Solicitor of Singapore and is currently a partner of a law frm in Singapore,
Messrs Derrick Wong & Lim BC LLP. He has been practising law since 1974 and obtained his law degree from the University of Singapore. Mr Wong
is currently the Chairman of Utraco Pte Ltd, an Executive Director of Utraco Greentech Pte Ltd and the Honorary Chairman of Lucrum Pte Ltd, and
has many years of experience in managing companies. Mr Wong graduated with a Master of Business Administration majoring in Marketing and
General Management from the University of Singapore. The Board is of the view that the AC has the necessary experience and expertise required
to discharge its duties.
The AC schedules a minimum of four meetings in each fnancial year. The meetings are held, inter alia, for the following purposes:-
• reviewing the Company’s half-year/quarterly results announcements, the fnancial year statements of the Company and the consolidated
fnancial statements of the Group before their submission to the Board of Directors for approval of release of the results announcement to the
SGX-ST;
• reviewing the audit plans and reports of the external auditors and to consider the effectiveness of the actions taken by the Management on
the auditors’ recommendations;
• reviewing the assistance and co-operation given by the Management to the external auditors;
• reviewing the signifcant fnancial reporting issues and judgements so as to ensure the integrity of the fnancial statements and any formal
announcements relating to fnancial performance;
• making recommendations to the Board on the appointment, re-appointment and removals of external auditors and approving the remuneration
and terms of engagement of the external auditors;
• reviewing the effectiveness of the internal audit function;
• evaluating the adequacy of the internal control systems of the Group by reviewing written reports from the internal and external auditors, and
the Management’s responses and actions to correct any defciencies;
• evaluating the adherence to the Group’s administrative, operating and internal accounting controls; and
• reviewing interested person transactions, as defned in the Listing Manual of the SGX-ST.
The AC annually reviews the independence of the external auditors. There was no non-audit work carried out by the external auditors during
the current fnancial year. The AC is satisfed with the independence and objectivity of the external auditors, and is pleased to confrm their re-
appointment.
In addition, the AC is tasked to commission investigations into matters where there is suspected fraud or irregularity, or failure of internal controls
or infringement of any law, rule or regulation which has or is likely to have a material impact on the Company’s operating results or fnancial
position, and to review its fndings. It also has full access to and co-operation of the Management as well as full discretion to invite any Director or
key executive to attend its meetings, and reasonable resources to enable it to discharge its functions properly.
The AC will meet with the external auditors and with the internal auditors without the presence of the Management, at least annually and
whenever necessary to review the adequacy of audit arrangement, with emphasis on the scope and quality of their audit and the independence,
objectivity and observations of the auditors.
The Company has implemented a whistle-blowing policy in 2010, which is duly endorsed by the AC and approved by the Board. The whistle-
blowing policy will provide employees of the Group well-defned and accessible channels through which they may, in confdence, access the
appropriate person to raise concerns about improper conduct within the Group, and possible improprieties in matters of fnancial reporting or
other matters. The Audit Committee’s objectives are to ensure that arrangements are in place for the independent investigation of such matters
and for appropriate follow-up action.