notes to the financial statements - Food Empire Holdings Limited

Food Empire Holdings Limited Annual Report 2012
CORPORATE GOVERNANCE (cont’d)
I) AUDIT COMMITTEE (cont’d)
- Principle 11: Establishment of Audit Committee (“AC”) with written terms of reference (cont’d)
The Group has complied with Rules 712 and 716 of the SGX-ST Listing Manual.
The AC has recommended to the Board of Directors that the Auditors, Ernst & Young LLP, Certified Public Accountants be nominated
for re-appointment as Auditors at the forthcoming Annual General Meeting of the Company.
The AC has established the whistle-blowing policy where staff of the Group may, in confidence, raise concerns about possible
improprieties in matters of financials that might have a significant impact on the Group, such as actions that may lead to incorrect
financial reporting, unlawful and/or otherwise amount to serious improper conduct according to Company Policy.
J) INTERNAL CONTROLS AND INTERNAL AUDIT
- Principle 12: Sound systems of internal audit
- Principle 13: Setting up independent internal audit function
The Board is responsible for the Group’s systems of internal controls and risk management and for reviewing the adequacy and
integrity of these systems. However, such systems are designed to manage rather than eliminate completely the risk of failure to
business objectives. It should also be noted that any system could provide only reasonable and not absolute assurance against
material misstatement (the occurrence of human errors), losses or fraud.
The Group outsources its internal audit function to Yang Lee & Associates to assess the adequacy of internal controls. They conduct
reviews on the effectiveness of the Group’s internal control systems covering the financial, operational and compliance risks.
The AC reviews and approves internal audit scope and plan. The internal auditors report directly to the AC. Internal control
weaknesses identified during the internal audit reviews and the recommended corrective actions are reported to the AC periodically.
The internal auditors completed a review during the last financial year ended 31 December 2012. The findings and recommendations
of the internal auditors, management’s responses, and management’s implementation of the recommendations had been reviewed
and discussed by the AC.
The Group’s external auditors also report to the AC on any material internal control weaknesses noted during the course of
their audit.
The Group has also appointed Yang Lee & Associates to develop an Enterprise Risk Management Framework for the Group.
The management reports to the AC on the Group’s risk profile, the status of risk mitigation action plans and updates on the
following areas:
1) assessment of the Group’s key risks by major business units and risk categories;
2) identification of specific risk owners who are responsible for the risks identified;
3) description of the processes and systems in place to identify and assess risks to the Group;
4) status and changes in plan undertaken to manage key risks; and
5) description of the risk monitoring and escalation processes and also systems in place.
The Group has taken note of the key risks factors identified and other matters arising as aforesaid and the Group will request the
internal auditors to take such risk factors into consideration in the next annual internal audit plan when executing the system and
process review on the identified key risk areas. The Board with the assistance of the AC, will continually assess on the adequacy and
effectiveness of the Group’s risk management and internal control systems.
K) COMMUNICATION WITH SHAREHOLDERS
- Principle 14: Regular, effective and fair communication with shareholders
Price sensitive information is first publicly released via SGXNET before any meeting with any group of investors or analysts. Results
are announced within the mandatory period on a quarterly basis to SGX-ST.
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