35
Report on
Corporate Governance
The AC has reviewed the non-audit services in relation to tax services
,
other advisory services and goods
and service tax services provided by FKT
.
The Board
,
with the concurrence of the AC is of the opinion that
the independence and objectivity of the external auditors have not been affected as a substantial amount of
non-audit fees paid in FY2015 was for the IPO of the Company and is not expected to be recurring
.
The AC and the Board are of the view that the audit firms engaged by the Group are adequately resourced
and registered with the Accounting and Corporate Regulatory Authority or registered with and/or regulated
by an independent audit oversight body acceptable to the Singapore Exchange Securities Trading Limited
.
The AC has recommended to the Board the re-appointment of FKT as external auditors of the Company at
the forthcoming AGM of the Company
.
The Group has appointed different auditors for its overseas subsidiaries during the financial year under
review
.
The Board and the AC have reviewed the appointment of different auditors for its subsidiaries and were
satisfied that the appointment of different auditors would not compromise the standard and effectiveness
of the audit of the Group
.
The Company is in compliance with Rules 712 and 715 of the Catalist Rules in
relation to its independent auditors
.
The Company
’
s whistle-blowing programme serves to encourage and to provide a channel for staff of
the Group and any external parties to report and raise
,
in good faith and in confidence
,
their concerns
about possible improprieties in matters of financial reporting or other matters
.
To facilitate independent
investigation of such matters and appropriate follow up actions
,
all whistle-blowing reports are directed to
the AC via a dedicated email address (geeaik
.
lee@lhngroup
.
com
.
sg)
.
The whistle-blowing programme has
been communicated to all staff and it has also been posted on the Company
’
s website at
http
:
//www
.
lhngroup
.
com
.
sg/
.
The AC has power to conduct or authorise investigations into any matter within the AC
’
s scope of
responsibility
.
Depending on the nature of the concern raised or information provided
,
the investigation may
be conducted involving one or more of these persons or entities
:
• The investigation panel directed by the AC
;
• The external or internal auditor
;
and/or
• Forensic professionals
.
For FY2015
,
the Board had concluded
,
with the help of the NC
,
that the members of the AC are appropriately
qualified to discharge their duties and responsibilities
.
The Board
’
s view is that adequate and reasonable
assistance and support has been properly rendered by the Management to the AC and that the AC has
effectively and efficiently contributed to the Board and the Group
.
The AC chairman is a fellow of the Institute
of Singapore Chartered Accountants and a fellow of the Chartered Association of Certified Accountants
,
United Kingdom and is currently
,
a director of R Chan & Associates PAC
,
a public accounting corporation
in Singapore
.
During the last quarter of 2015
,
the AC was provided with information such as updates on the
changes to the Singapore
’
s Financial Reporting Standards by the external auditors in the course of their
report to AC
.
Principle 13 – Internal Audit
The AC relies on reports from the Management and external and internal auditors on any material
non-compliance and internal control weaknesses
.
Thereafter
,
the AC oversees and monitors the
implementations thereto
.
Currently
,
the Group has outsourced its internal audit function to Ernst & Young Advisory Pte
.
Ltd
.
(the
“
IA
”
)
which reports directly to the AC
.
The IA has an administrative reporting function to Management where
planning
,
co-ordinating
,
managing and implementing internal audit work cycle are concerned
.
The work
undertaken by the IA
,
are carried out in accordance with the standards set by internationally recognised
professional bodies including Standards for the Professional Practice of Internal Auditing set by the Institute
of Internal Auditors
.
The IA will report their audit findings and recommendations directly to the AC
.
The IA
has unfettered access to all the Group
’
s documents
,
records
,
properties and personnel
,
including access
to the AC
.
