notes to the financial statements - Far East Orchard Limited

Corporate Governance Statement
as at 27 March 2009
In the last financial year, the Audit Committee held five meetings. In those meetings, the Committee reviewed, inter
alia, the internal auditor’s report on interested party transactions and reports on other areas of the Group’s business,
the internal auditor’s audit plan and cost for the current financial year, the independent auditor’s audit plan and final
audit report, the year-end and quarterly announcements on financial statements, the Group’s year-end and quarterly
performances, and also discussed corporate governance matters.
PRINCIPLE 12
The Board should ensure that the Management maintains a sound system of internal controls to safeguard the
shareholders’ investments and the company’s assets.
The Company places importance on the maintenance of a sound system of internal controls in order to safeguard
shareholders’ interests and the Company’s assets. The Audit Committee ensures that the internal auditors conduct
reviews of the Company’s material internal controls, including financial, operational and compliance controls. Risk
management and financial management are also assessed.
The Audit Committee reviews the effectiveness of the Company’s internal controls on behalf of the Board. In their
review, the Committee considers the nature of the risks facing the Company and the extent to which these risks are
acceptable to bear, the likelihood of risks materialising and the Company’s ability to reduce their incidence and
impact on the business, and the cost versus the benefit of managing the risks. Having reviewed the various areas of
potential risks facing the Company and the control measures employed to manage these risks, the Audit Committee is
satisfied that the internal controls in the Company are adequate.
PRINCIPLE 13
The company should establish an internal audit function that is independent of the activities it audits.
The Company outsources its internal audit function to the Group Internal Audit Department (“GIA”) of Far East
Organization, the Company’s parent. GIA reports directly to the Audit Committee and also reports administratively to
the Chairman of the Board.
Having regard to the Standards for the Professional Practice of Internal Auditing of the Institute of Internal Auditors, and
having reviewed the functions and organisational structure of GIA, the Audit Committee is satisfied that GIA meets the
requisite standards, is adequately resourced, and has appropriate standing within the Company.
The Audit Committee ensures the adequacy of the internal audit function by examining the scope of GIA’s work,
the quality of their reports, their qualifications and training, their relationship with the independent auditor and their
independence of the areas reviewed.
PRINCIPLE 14
Companies should engage in regular, effective and fair communication with shareholders.
The Company strives to disclose information to its shareholders in a timely manner and typically makes announcements
through SGXNET. It also responds to queries from investors, fund managers and analysts but without making selective
disclosure.
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ORCHARD PARADE HOLDINGS LIMITED ANNUAL REPORT 2008