BUILDING ON OUR EXTENSIVE NETWORK
As proper risk management is a significant component of a sound system of internal control, the Group has
put in place a strategic enterprise risk management (“ERM”) framework since FY2007. The Board recognises the
importance of establishing a formal ERM Framework to facilitate the governance of risks and monitoring the
effectiveness of internal controls.
In addition, the Group has set up an executive Risk Management Committee (“RMC”) to oversee that
appropriate risk management policies are put in place and there are processes to evaluate the risks monitored
under the ERM framework. The RMC, comprising members of the Senior Management team, is responsible for
setting the direction of corporate risk management and monitoring the implementation of risk management
policies and procedures.
The RMC has established an enhanced risk management policy to provide guidance to Management on key
risk parameters. The significant risks in the Group’s business, including mitigating measures, were also reviewed by
the RMC and reported to the AC and the Board. Risk registers are maintained by the business and operational
units which identify the key risks facing the Group’s business and the internal controls in place to manage those
risks. These risks have been categorized as strategic, operational, financial or compliance risks and the main
areas of financial risk, faced by the Group are foreign currency exchange risk, interest rate risk, credit risk and
liquidity risk.
The RMC together with the President and Group Financial Controller have confirmed to the AC and the Board
the adequacy and effectiveness of the risk management system and internal controls.
Quarterly and full year results are reviewed by the AC prior to their submission to the Board as are interested
person transactions that fall within the scope of Chapter 9 of the Listing Manual of the SGX-ST.
The AC, with the assistance of the Internal and External Auditors, reviews and reports to the Board on the
adequacy of the Company’s system of internal controls, including financial, operational, compliance and
information technology controls and taking into consideration the risk management perspective.
The AC may examine whatever aspects it deems appropriate of the Group’s financial affairs, its internal and
external audits and its exposure to risks of a regulatory or legal nature. It keeps under review the effectiveness
of the Company’s system of accounting and internal financial controls, for which the directors are responsible.
It also keeps under review the Company’s programme to monitor compliance with its legal, regulatory and
contractual obligations.
The Board has received written assurance from the President and Group Financial Controller:
(a) that the financial records have been properly maintained and the financial statements give true and fair
view of the Group’s operations and finances; and
(b) regarding the effectiveness of the Group’s risk management and internal control systems.
Based on the internal controls established and maintained by the Group, work performed by the Internal
Auditor, and the statutory audit conducted by the External Auditor, and reviews performed by Management,
Risk Management Committee and various Board committees, the Board, with the concurrence of the AC, is of
the opinion that the system of internal controls, including financial, operational, compliance and information
technology controls and risk management, were adequate as at 30 April 2015 to meet the needs of the Group’s
existing business objectives, having addressed the risks which the Group considers relevant and material to its
operations. While acknowledging their responsibility for the system of internal controls, the Directors are aware
that such a system is designed to manage, rather than eliminate risks, and therefore cannot provide absolute
assurance in this regard, or absolute assurance against the occurrence of material errors or mis-statements, poor
judgment in decision-making, human errors, losses, fraud or other irregularities.
Corporate Governance
(Cont’d)
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STAMFORD TYRES CORPORATION LIMITED
