31
Annual Report 2015
TEHO INTERNATIONAL INC LTD.
Annual review of the Group’s risk management and internal control systems
With the assistance of the AC, the Board has undertaken an annual assessment on the adequacy
and effectiveness of the Group’s risk management and internal control systems over financial,
operational, compliance and information technology risks. The assessment considered issues
dealt with in reports reviewed by the AC and the Board during the financial year together with any
additional information necessary to ensure that the Board has taken into account all significant
aspects of risks and internal controls for the Group for FY2015. The reports reviewed by the
AC and the Board during the financial year include (a) the External Auditors’ Salient Features
Memorandum in relation to the FY2015 external audit, (b) the Internal Auditors’ internal audit
report for FY2015, and (c) the Enterprise Risk Management Review report.
The Board’s annual assessment in particular considered:
(a) the changes since the last annual assessment in the nature and extent of key risks; and the
Group’s ability to respond to changes in its business and external environment;
(b) the scope and quality of management’s on-going monitoring of risks and of the system of
internal controls, and the work of the Internal Auditors and other providers of assurance;
and
(c) the incidence of significant internal control weaknesses that were identified during the
financial year.
In order to obtain assurance that the Group’s risks are managed adequately and effectively, the
Board had reviewed the key risks which the Group is exposed to, as well as an understanding of
the countermeasures and internal controls that are in place to manage those risks.
The Board has received assurance from the CEO and the chief financial officer (a) that the financial
records have been properly maintained and the financial statements for FY2015 give a true and
fair view of the Group’s operations and finances; and (b) that the Group has put in place and
will continue to maintain a reasonably adequate and effective system of risk management and
internal controls.
Opinion on adequacy of Group’s internal controls
Based on the internal controls established and maintained by the Group, work performed by
the Internal Auditors and External Auditors, and reviews performed by the management and the
Board, the Board with the concurrence of the AC is of the opinion that the risk management
and internal control systems maintained by the Group, addressing the financial, operational,
compliance and information technology risks of the Group are adequate and effective as at 30
June 2015. The Board and the AC note that all internal control systems contain inherent limitations
and no system of internal controls can provide absolute assurance against the occurrence of
material errors, poor judgement in decision-making, human error, fraud or other irregularities.
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 comprises entirely independent directors, namely Mr Kwah Thiam Hock, Ms Joanne
Khoo Su Nee and Mr Oo Cheong Kwan Kelvyn. The Chairman of the AC is Mr Kwah Thiam Hock.
The AC has written terms of reference clearly setting out its authority and duties.
Two members of the AC (including the Chairman) have accounting and related financial
management expertise. The Board is of the view that the AC has the necessary experience and
expertise required to discharge its duties.
The AC has explicit authority to investigate any matter within its terms of reference, full access
to and co-operation by management and full discretion to invite any director or executive officer
to attend its meetings, and reasonable resources to enable it to discharge its functions properly.
The AC shall meet periodically to perform,
inter alia
, the following functions:
(a) to review with the external auditors the audit plan, their evaluation of the system of internal
controls, the audit report, the management letter and the management’s response;
REPORT OF
CORPORATE GOVERNANCE
