DEFINING DESIGN
QUALITY
28
Audit Committee
Principle 12: The Board should establish an Audit Committee with written terms of reference which clearly set out its
authority and duties.
The AC is chaired by Mr Prabhakaran S/O Narayanan Nair and comprises Mr Wong Ah Long and Mr Tan Cher Liang. All the
AC members, including the Chairman, are independent directors.
The AC holds at least four meetings in each financial year. The principal functions of the AC in accordance with its written
terms of reference are as follows:
•
reviewing the Group’s financial statements, and significant financial reporting issues and judgments so as to ensure the
integrity of the financial statements and any formal announcements relating to the Group’s financial performance before
their submission to the Board;
•
reviewing the audit plans and reports of the internal and external auditors and to consider the effectiveness of the actions
taken by management on the auditors’ recommendations;
•
ensuring that management provides assistance and co-operation to the internal and external auditors;
•
evaluating the adequacy and effectiveness of the Group’s internal controls by, inter alia, reviewing the reports of the
internal and external auditors, and management’s responses and actions to correct any deficiencies and reporting the
same to the Board at least annually;
•
reviewing the adequacy and effectiveness of the Group’s internal audit function;
•
making recommendations to the Board on the appointment, re-appointment and removal of external auditors;
•
approving the remuneration and terms of engagement of the external auditors;
•
reviewing the independence and objectivity of the external auditors at least annually; and
•
reviewing interested person transactions (as defined in the Listing Manual).
In addition, the AC is tasked to commission independent investigations of any suspected fraud or irregularity, which has or
is likely to have a material impact on the Group’s operating results or financial position, and to review the findings of such
investigations. The AC has reasonable resources to enable it to discharge its responsibilities properly. It has full access to,
and the co-operation of, management and full discretion to invite any director or key executive to attend its meetings.
The AC also meets with the internal auditors and external auditors without management, at least annually and whenever
necessary to review the adequacy of audit arrangements, with emphasis on the scope and quality of audit and the
independence and objectivity of the auditors.
The external auditors provide regular updates and briefings to the AC on changes to accounting standards and other
financial issues to enable the AC to keep abreast of such changes and its corresponding impact on the financial statements.
External Auditors
The AC reviews the independence of the Group’s external auditors annually. No non-audit services were rendered by the
external auditors, RSM Chio Lim LLP, during FY2014. The audit fees paid/payable to the external auditors, RSM Chio Lim
LLP, for FY2014 are S$185,000. The partner in charge of auditing the Group, Mr Eu Chee Wei David, was appointed from
FY2014. The AC is satisfied with the independence and objectivity of the external auditors, RSM Chio Lim LLP.
The Company has complied with Rules 712 and 715 of the Listing Manual in the appointment of its external auditors.
Whistle-blowing Policy
The Company implemented a whistle-blowing policy in 2010, which provides the Group’s employees and any other persons
withwell-definedandaccessiblechannels throughwhich theymay, inconfidence, raiseconcerns about possible improprieties
in matters of financial reporting or other matters. Whistle-blowing concerns may be reported using a prescribed form, in
person or via letter, electronic mail or telephone call. The AC reviews such policy to ensure that arrangements are in place
for independent investigation of such matters and for appropriate follow-up action.
The Company will protect the identity and interest of all whistle-blowers, and treat all information received confidentially.
Anonymous reports will also be accepted.
Internal Audit
Principle 13: The company should establish an effective internal audit function that is adequately resourced and
independent of the activities it audits.
We have engaged Nexia TS Risk Advisory Pte. Ltd. (
Nexia
) as our internal auditors. Nexia is a certified public accounting
firm and a member of the Institute of Internal Auditors (
IIA
). In performing the internal audit, Nexia applied the Standards
for the Professional Practice of Internal Auditing set by IIA.
The Board recognises that it is responsible for maintaining a sound system of internal controls to safeguard shareholders’
investments and the Group’s business and assets. The AC approves the hiring, removal, evaluation and compensation of the
internal auditors. The internal auditors report primarily to the Chairman of the AC and have full access to the documents,
records, properties and personnel (including the AC) of the Group. The audit plan is submitted to the AC for approval prior
to commencement of the internal audit.
The AC reviews the adequacy and effectiveness of the internal audit function at least annually to, inter alia, ensure that (i) the
internal audit function is adequately resourced and has appropriate standing within the Group; and (ii) the recommendations
of the internal auditors are properly implemented.
Corporate Governance Report
