The ARMC reviews and guides Management in the formulation of risk policies and processes to identify, evaluate and manage significant
risks. The Management reports to the ARMC on control policies and procedures and highlights all significant matters to the ARMC on
regular basis. Risks arising from the Group’s financial operations are separately disclosed in the audited financial statements of this
Annual Report.
The BSC was established in 2012 to oversee and monitor the establishment and maintenance of the safety practices and policies of
the Group.
The BSC comprises the following members, all of whom are Independent and Non-Executive Directors:
Khor Poh Hwa
Chairman and Independent Director
Koh Lian Huat
Member and Lead Independent Director
Ong Seh Hong
Member and Independent Director
Internal Controls
The Board acknowledges that it is responsible for the overall internal control framework, but recognizes that no cost effective internal
control system will preclude all errors and irregularities. The system is designed to manage rather than eliminate the risk of failure to
achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The
ARMC is responsible for ensuring that a review of the adequacy of the Company’s internal financial controls, operational and compliance
controls, as well as risk management policies and systems established by the Management is conducted at least annually.
The Board has received assurance from the CEO and the CFO:
a.
that the financial records have been properly maintained and the financial statements give a true and fair view of the Company’s
operations and finances; and
b.
regarding the effectiveness of the Company’s risk management and internal control systems.
Based on the internal auditors established and maintained by the Group, work performed by the internal and external auditors and
reviews performed by the Management, ARMC and the Board, the Board with the concurrence of the ARMC is of the opinion that the
systems of the internal controls is adequate to address the financial, operational, compliance risks, information technology controls and
risk management system were adequate and effective as at 31 December 2014.
Internal audit
Principle 13:
The company should establish an effective internal audit function that is adequately resourced and independent of the activities
it audits.
The Group has outsourced its internal audit function to RSM Ethos Pte Ltd. The internal auditors has adopted the Standards for
Professional Practice of Internal Auditing set by the Institute of Internal Auditors. The internal auditors primary reported to the ARMC
Chairman.
The internal auditors plans its audit schedules in consultation with the Management and its plans are submitted to the ARMC for approval.
The ARMC reviews and approves the internal audit plans and resources annually. Based on their review, the ARMC believes that the
internal auditors is independent and has the appropriate standing to perform its functions effectively. Based on the information provided
to the ARMC, nothing has come to the ARMC’s attention to cause the ARMC to believe that the internal control system is inadequate.
CORPORATE GOVERNANCE REPORT
Hock Lian Seng Holdings Limited
Annual report 2014
24
