BUILDING ON OUR EXTENSIVE NETWORK
The AC’s key terms of reference describe its responsibilities and these include:
z
assisting the Board in discharging its statutory responsibilities on financing and accounting matters;
z
reviewing significant financial reporting issues and judgements to ensure the integrity of the financial
statements and any formal announcements relating to financial performance;
z
reviewing the scope and results of the audit and its cost effectiveness, and the independence and
objectivity of the external auditor;
z
reviewing and evaluating with internal auditors, the adequacy and effectiveness of the system of internal
controls, including financial, operational, compliance and information technology controls, and risk
management policies and framework;
z
reviewing any interested person transactions as defined in the Listing Manual;
z
appraising and reporting to the Board on the audits undertaken by the external auditor and internal
auditor, the adequacy of disclosure of information, and the appropriateness and quality of the system of
management and internal controls;
z
making recommendations to the Board on the appointment, re-appointment and removal of the external
auditor and internal auditors, and approving the remuneration and terms of engagement of the external
auditor and internal auditors; and
z
reviewing whistle-blowing investigations within the Group and ensuring appropriate follow-up action, if
required.
The internal audit function is outsourced to an external professional firm. The Internal Auditor conducts regular
audit of internal control systems of the Group’s companies, recommends necessary improvements and
enhancements, and reports directly to the AC.
The AC reviews the scope, the audit plan, the results and effectiveness of the External and Internal Auditor and
has met with the External Auditor and Internal Auditor separately without the presence of Management for the
year in review. To keep abreast of the changes in financial reporting standards and related issues which have a
direct impact on financial statements, discussions are held with the External Auditor where applicable, when they
attend the AC Meetings.
The AC having reviewed the nature and extent of non-audit services provided by Ernst & Young LLP (“EY”)
and EY member firms, including fees paid in respect of the year ended 30 April 2015, is of the view that the
independence and objectivity of EY as External Auditor of the Company has not been compromised. The fee
payable to the External Auditor is disclosed on page 67 of this Annual Report.
The AC has also reviewed and confirmed that EY is a suitable audit firm to meet the Company’s audit obligations,
having regard to the adequacy of resources and experience of the firm and the assigned audit engagement
partner, EY’s other audit engagements, size and complexity of the Stamford Tyres Group, number and experience
of supervisory and professional staff assigned to the audit. Accordingly, the AC recommended to the Board the
re-appointment of EY as External Auditor of the Group for the year ending 30 April 2016. The Group has complied
with Rules 712 and 715 of the Listing Manual in relation to its auditing firms. EY has been engaged to audit the
accounts of the Company and its Singapore-incorporated subsidiaries. The accounts of the significant foreign-
incorporated subsidiaries are audited by EY member firms in the respective countries.
Corporate Governance
(Cont’d)
ANNUAL REPORT 2015
24
