DRIVING IT UP
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ANNUAL REPORT 2016
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reviewing the scope and results of the audit and its cost effectiveness, and the independence and
objectivity of the external auditor;
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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;
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reviewing any interested person transactions as defined in the Listing Manual;
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appraising and reporting to the Board on the audits undertaken by the external auditor and internal
auditors, the adequacy of disclosure of information, and the appropriateness and quality of the system of
management and internal controls;
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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
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reviewing whistle-blowing investigations within the Group and ensuring appropriate follow-up action, if required.
The AC reviews the scope, the audit plan, the results and effectiveness of the External and Internal Auditors 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 2016, 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 73 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 2017. 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. The
Group has complied with Rules 712 and 715 of the Listing Manual in relation to its auditing firms.
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.
Corporate Governance
(Cont’d)
