30
TEHO INTERNATIONAL INC LTD.
Annual Report 2015
Phase 2:
(a) Sales, receivables and collections
(b) Treasury and cash management
(c) Human resources and payroll
On the recommendation of the AC, the Internal Auditors continued with the third full cycle internal
controls review in FY2015 which covered the following major areas of operations of TIEC Holdings
Pte. Ltd., ECG Property Services Pte. Ltd. and its subsidiaries:
(a) Sales, receivables and collections
(b) Project management
(c) Procurement to payables
(d) Treasury and cash management
(e) Human resources and payroll
(f) Financial close reporting
The aforementioned review was completed and the Internal Auditors issued a report to the AC
on 27 August 2015. The report, which included recommendations and areas of improvement,
was also disseminated to the key members of management for follow-up action. Based on the
actions taken by the Group on the recommendations made by the Internal Auditors, the on-going
review of and the continuing efforts at enhancing internal controls and processes, the Board, with
the concurrence of the AC, is satisfied that in the absence of any evidence to the contrary, the
system of internal controls in place is adequate in meeting the needs of the Group in its current
business environment.
In the audit of the Company’s financial statements for FY2015, KPMG LLP (“External Auditors”),
the external auditors of the Company, informed the Board that it did not notice any significant
deficiency or major lapses in the internal controls that would warrant highlighting to the
management, AC and the Board.
Enterprise Risk Management
The AC had also engaged the Internal Auditors to undertake an initial Enterprise Risk
Management Review of the Group, which commenced in October 2013, to enable the Board
and management to understand the inherent industry, financial, operational, compliance and
information technology risks of the Group. Following the Group’s diversification into the real estate
business in the second half of the financial year ended 30 June 2014, the scope of the Enterprise
Risk Management Review was expanded to cover the newly acquired companies in the Property
Development segment, namely TIEC Holdings Pte. Ltd. (acquisition completed in May 2014), and
ECG Property Services Pte. Ltd. and its subsidiaries (acquisition completed in November 2014).
As part of the Enterprise Risk Management Review, the Internal Auditors engaged key members
of management including the CEO as well as the AC members to carry out the following:
(a) Evaluate the current internal and external operating environment of the various business
units of the Group;
(b) Identify possible risks, potential contributing factors and consequences arising from the
crystalisation of those risks;
(c) Determine the impact and likelihood of the identified risks;
(d) Identify improvement opportunities for control gaps; and
(e) Prioritise and rank the identified risks.
The Internal Auditors have presented a report which includes the findings of the Enterprise Risk
Management Review to the AC on 9 February 2015. The report highlighted the key risks (i.e.
risks with a high likelihood of occurring and having a major negative consequence) that the
Group is exposed to. As part of follow-up to the Enterprise Risk Management Review, the AC
had engaged Internal Auditors to:
(a) develop an Enterprise Risk Management framework including policies and procedures for
risk reporting and monitoring;
(b) assist management in documenting the required processes or procedures for a robust
Enterprise Risk Management framework into an Enterprise Risk Management Manual; and
(c) conduct risk management competency and awareness training with an objective of briefing
and updating the Board and members of management on the Enterprise Risk Management
framework, processes as well as risk monitoring and reporting.
REPORT OF
CORPORATE GOVERNANCE
