In appointing the audit firms for the Company, the Audit Committee is satisfied that the Company has complied
with the requirements of Rule 712 and 715 of the Listing Manual of the SGX-ST.
Principle 11 – Sound system of internal controls to safeguard the shareholders’ investments and the
company’s assets
Principle 13 – Establishment of an internal audit function that is independent of the functions it audits
The Board considers that the Group has in place, a system of internal controls of its procedures and processes
maintained by the Company’s Management to safeguard shareholders’ investments and assets of the Company.
The system of internal controls addressing financial, operational, compliance and information technology
controls and risk management, is designed to provide reasonable and not absolute assurance for achieving
certain internal control standards and helps the Group manage rather than to eliminate the risk of failure to
achieve business objectives.
Following the departure of the in-house Internal Audit Director, the Company has out-sourced the internal
audit function to an independent assurance service provider, Mazars LLP (“internal auditor” or “IA”), to perform
the internal audit works of the Group. The AC is of the view that the IA has adequate resources to perform the
functions and maintained their independence from the activities that IA audits. The IA subscribes to, and is
guided by the standard established by internationally recognized professional bodies including the Standards
for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors and has incorporated
these standards into its audit practices.
The focus of the Internal Audit function is to strengthen the internal control structure and risk management of
the Group through the conduct of independent and objective reviews. The IA also conducts tests to verify the
Group’s assets and liabilities and to check on compliance with the Group’s system of internal controls including
financial, operational and compliance controls.
In addition to the annual internal audit plan, the IA is also involved in conducting system or process reviews
that may be requested by Management on specific areas of concern during the course of the year. By allowing
such flexibility in the audit work plan, the IA is able to help Management understand risks and internal control
issues associated with the changes taking place in their businesses by providing them with timely input on new
or emerging issues during the year.
The Audit Committee has reviewed the effectiveness, adequacy and robustness of the Company’s risk
management policies, procedures and internal controls, including financial, operational, compliance and
information technology controls. Material non-compliance and internal control weakness noted during the audit,
and the auditors’ recommendations to address such non-compliance and weakness will be reported to the Audit
Committee. Management follows up and implements the internal and external auditors’ recommendations.
Apart from the internal audits, the external auditors, Ernst & Young, also contribute an independent perspective
on relevant internal controls arising from their financial audit and report their findings to the AC.
I N N O T E K L I M I T E D
A N N U A L R E P O R T 2 0 1 5
29
CORPORATE
GOVERNANCE REPORT
