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THE STRAITS TRADING COMPANY LIMITED
The Group has engaged KPMG Services Pte. Ltd. to develop and implement a Board Assurance Framework which includes an
enterprise risk management framework to identify the significant risks facing each major business segment, the potential impact
and likelihood of those risks occurring, the control effectiveness and action plans taken to mitigate those risks. The Group has also
developed a risk governance structure, which provides details on the roles and responsibilities for the Board and Management in
risk monitoring, escalation, mitigation and reporting.
The Group has established key risks indicators with tolerance limits to monitor movements in its significant risks and to proactively
manage them within acceptable levels. These key risk indicators have been reviewed and approved by the Board and they are
also monitored on a quarterly basis.
The internal auditors regularly review all significant controls, policies and procedures and highlight all significant matters to the
Management and the AC.
During FY2015, the Board and AC reviewed the adequacy and effectiveness of the Group’s internal controls in relation to the
significant risks, including financial, operational, compliance and information technology controls, and risk management systems.
Based on the work performed by the external and internal auditors, Management’s representations and Board enquiries and
discussions, the Board is assured that the Group’s risk management and internal controls systems are adequate and effective. In
addition, the Board has received assurance from the Executive Chairman and Chief Financial Officer that the financial records
have been properly maintained and properly drawn up in accordance with the Companies Act and Singapore Financial Reporting
Standards and are not false or misleading in any material aspect, and give a true and fair view of the Group’s operations and
finances and that the Group’s risk management and internal control systems are effective.
Based on the internal controls established and maintained by the Group, work performed by the internal and external auditors,
and reviews performed by and assurance from the Executive Chairman and Chief Financial Officer, the internal auditors, the AC
and the Board, the Board, with the concurrence of the AC, is of the opinion that the Group’s system of risk management and
internal controls, addressing financial, operational, compliance and information technology risks, were adequate and effective as
at 31 December 2015.
However, the Board is also aware that such a system can only provide reasonable, but not absolute, assurance that the Group will
not be adversely affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. The Board
also notes that no system of internal controls and risk management can provide a complete assurance against human error, poor
judgement in decision making, losses, fraud or other irregularities.
INTERNAL AUDIT
(Principle 13)
The Company’s internal audit function has been outsourced to KPMG Services Pte. Ltd. The internal auditors reported directly to
the Chairman of the AC on audit matters.
In carrying out its duties, the internal auditors have adopted the Standards for Professional Practice of Internal Auditing set by The
Institute of Internal Auditors.
For FY2015, the AC reviewed and approved the annual internal audit plans and ensured that the internal audit functions were
adequately resourced with competence, and had appropriate standing within the Group and cooperation of the Management to
carry out its duties effectively.
REPORT ON CORPORATE GOVERNANCE
