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TEHO INTERNATIONAL INC LTD.
Annual Report 2016
REPORT
OF CORPORATE GOVERNANCE
In the audit of the Company’s financial statements for FY2016, the External Auditors
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.
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
FY2016. 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 FY2016 external
audit, and (b) the Internal Auditors’ internal audit report for FY2016.
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 ongoing 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 FY2016
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 appointed 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 2016. 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.
