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TEHO INTERNATIONAL INC LTD.
Annual Report 2016
REPORT
OF CORPORATE GOVERNANCE
As part of follow-up to the Enterprise Risk Management Review, the AC had engaged the
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.
Internal controls
On the recommendations of the AC, the Internal Auditors continued with the fourth full cycle
internal controls review that span over/ will span over FY2016, FY2017 and FY2018 which
covers the following major areas of operations of the Group under three phases:
Phase 1 (conducted in FY2016):
(a) Procurement through payment (for the Marine & Offshore segment)
(b) Inventory management (for the Marine & Offshore segment)
(c)
Financial close and reporting (for the Marine & Offshore segment)
(d) Project management (for the Property Development segment’s Cambodia operations)
(e) Development and constructionmanagement (for the PropertyDevelopment segment’s
Cambodia operations)
(f)
Sales, marketing and collection (for the Property Development segment’s Cambodia
operations)
(g) Information technology general controls
Phase 2 (scheduled to be conducted in FY2017):
(a) Sales and collection (for the Marine & Offshore segment)
(b) Project management (for the Property Development segment’s Singapore operations)
(c)
Development and constructionmanagement (for the PropertyDevelopment segment’s
Singapore operations)
(d) Sales, marketing and collection (for the Property Development segment’s Singapore
operations)
(e) Financial close and reporting
(f)
Treasury and cash management
(g) Human resource and payroll management
Phase 3 (scheduled to be conducted in FY2018):
(a) Procurement through payment (for the Marine & Offshore segment)
(b) Inventory management (for the Marine & Offshore segment)
(c)
Financial close and reporting (for the Marine & Offshore segment)
(d) Project management (for the Property Development segment’s Cambodia operations)
(e) Development and constructionmanagement (for the PropertyDevelopment segment’s
Cambodia operations)
(f)
Sales, marketing and collection (for the Property Development segment’s Cambodia
operations)
Phase 1 of the aforementioned reviewwas completed and the Internal Auditors issued a report
dated 31 July 2016 to the AC. The report, which included recommendations and areas for
improvements,wasalsodisseminatedtothekeymembersofmanagement forfollow-upaction.
On the Group’s Information Technology General Controls, the Internal Auditors highlighted
one high-priority observation, which is the absence of defined and documented policies and
procedures for certain areas of IT management. The Internal Auditors recommended the
Management to formalise such policies and procedures to minimise the risk of deviation from
the intended control procedures. Management confirmed to the AC that such observation will
be adequately addressed before the next AC meeting in February 2017. Notwithstanding such
absence of documented policies and procedures, the Management confirmed to the AC that
control procedures are currently in place for the Information Technology General Controls.
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.
