The Board has also received assurances from the CEO and the CFO that for the financial year under review, the
financial records have been properly maintained and the financial statements give a true and fair view of the Group’s
operations and finances; and based on the work performed by the internal and external auditors, the Group’s risk
management and internal controls, addressing financial, operational, compliance and information technology risks,
were effective as at 30 June 2015.
The system of risk management and internal controls established by the Group is designed to manage, rather than
eliminate, the risk of failure in achieving the Group’s goals and objectives. The Board wishes to state that the system
of internal controls provides reasonable, but not absolute, assurance as to financial, operational, compliance and
information technology risks. No such system can provide absolute assurance against the occurrence of material
errors and other situations not currently within the contemplation or beyond the control of the Board.
Principle 12: Audit Committee
The AC is regulated by a set of written terms of reference endorsed by the Board, setting out their duties and
responsibilities, and comprises three (3) Directors, all non-executive and all of whom are independent: Mr Michael
Grenville Gray – Chairman; Mr Khor Thiam Beng – Member and Mr Goh Chung Meng – Member.
The members of the AC are appropriately qualified to discharge their responsibilities, with Mr Michael Grenville Gray
having been a former partner in PricewaterhouseCoopers, Mr Goh Chung Meng having a wide financial management
experience and Mr Khor Thiam Beng being a senior practising lawyer.
The AC has explicit authority to investigate any matters within its terms of reference, full access to and the co-
operation of management and full discretion to invite any Director or key executive to attend its meetings and has
been given reasonable resources to enable it to discharge its functions. Each member of the AC will abstain from
voting in respect of matters in which he has an interest.
According to its terms of reference, the responsibilities of the AC include:
•
reviewing the scope and results of the external audit and the independence and objectivity of the external
auditors;
•
reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial
statements of the Company and any formal announcements relating to the Group’s financial performance;
•
reviewing and reporting to the Board at least annually the adequacy and effectiveness of the Company’s
internal controls, including financial, operational, compliance and information technology controls;
•
reviewing the effectiveness of the Company’s internal audit function;
•
making recommendations to the Board on the proposals to the shareholders on the appointment,
re-appointment and removal of the external auditor, and approving the remuneration and terms of
engagement; and
•
reviewing interested person transactions and provide such reports that are required by law or relevant
regulations.
The AC has reviewed the audit plan and scope of examination of the external auditors and the assistance given by
the Group’s officers to the auditors. No restriction was imposed by the management on the scope and extent of
the external audit.
The AC met with the Group’s external and internal auditors, in each case without the presence of management, to
discuss the results of their examinations and the evaluation of the Group’s system of internal controls. The AC also
reviewed the Group’s full-year results announcement, the financial statements of the Company and the consolidated
financial statements of the Group for the financial year ended 30 June 2015 prior to its recommendations to the
Board for approval. The statement of the external auditors of the Company about their reporting responsibilities
for the financial statements is set out in the “Independent Auditors’ Report” which is found in this Annual Report.
31
AVI-TECH ELECTRONICS LIMITED
| ANNUAL REPORT 2015
CORPORATE
GOVERNANCE
