68
CORPORATE GOVERNANCE REPORT
HOTEL ROYAL
̛Ө
ROYAL MEMORIES
Access to Information:
The ARC has full access and co-operation of management and has been given the
resources required for it to discharge its function properly. It also has full discretion to invite any director and
executive officer to attend its meetings. The external and internal auditors have unrestricted access to the ARC.
Risk Management and Internal Controls:
The external and internal auditors conducted annual review to assess
the risk profile including the review on the adequacy of the internal controls, addressing financial, operational,
compliance risks and information technology. Such review also assessed whether there was reasonable
assurance regarding the effectiveness and efficiency of operations, reliability of management and financial
reporting, and compliance with internal policies. Any material non-compliance or lapses in internal controls
together with corrective measures are reported to the ARC. The timely and proper implementation of all
required corrective, preventive or improvement measures are closely monitored.
The Company’s internal audit function has been outsourced to Philip Liew & Co. who is independent of the
Company’s business activities. Both the external and internal auditors report directly to the ARC their findings
and recommendations.
On an annual basis the ARC meets regularly with the Management and external auditors to review auditing and
risk management matters and discuss accounting implications of any major transactions including significant
financial reporting issues. It also reviews the internal audit functions to ensure that an effective system of internal
controls is maintained in the Group. On a quarterly basis, the ARC also reviews the interested person transactions
and the financial result announcement before their submission to the Board for approval. The ARC is kept
abreast by the Management and the external auditors and the company secretary of changes to accounting
standards, listing rules of the SGX-ST and other regulations which could have an impact on the Group’s business
and financial statements.
In addition, at least once a year, the ARC, together with the Board, reviewed the effectiveness and adequacy
of the Group’s system of internal controls put in place to address key financial, operational, compliance and
information technology controls and risk management system affecting the operations.
Based on Group’s framework of internal controls put in place, the internal control policies and procedures
established and maintained by the Group, as well as the reviews performed by the external and internal
auditors, the Board with the concurrence of the ARC is of the view that the internal control systems of the
Group, addressing the financial, operational, compliance and information technology risks are adequate as at
31 December 2015.
The Board acknowledges that it is responsible for the overall internal control and risk management framework.
However, it recognises that the system of internal control and risk management established by management
provides reasonable but not absolute assurance against human errors, frauds, poor judgement in decision
making and other irregularities.
The ARC meets with the internal auditors and external auditors separately and in each case, at least once a
year, without the presence of the Management to review any matter that might be raised.
The ARC is satisfied that the appointment of external auditors is in compliance with the requirements of Rule 712
and 715 of the SGX-ST Listing Manual. Accordingly, the ARC has recommended to the directors the nomination
of Deloitte & Touche LLP for re-appointment as external auditors of the Company at the forthcoming annual
general meeting. Rule 716 of the Listing Manual of the SGX-ST is not applicable as the same auditing firm is
appointed for the Company and its subsidiaries.
