FRONTLINE COVER FA 070606 CR2.indd

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38 frontline technologies corporation ltd annual report 2006 > corporate governance report (cont’d) 7. Principle XI: Audit Committee (cont’d) Principle XII: Internal Controls (cont’d) Principle XIII: Internal Audit (cont’d) c) reviewing with the internal auditors, the scope and results of internal audit procedures and their evaluation of the internal control system; d) evaluating the objectivity and independence of the external auditors annually and nominating external auditors for appointment or re-appointment. In performing its functions, the AC specifically empowered and authorised to investigate any matter within its terms of reference and has full access to and co-operation by management and full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. The AC meets with the external auditors without the presence of the Frontline management at least once a year to ensure that there are no unresolved areas of concern. Save for the fees paid for tax services rendered, there are no other non-audit fees payable to Frontline’s external auditors . The AC has also reviewed all non-audit services provided by the external auditors and it is of the view that such services would not affect the independence of the external auditors. The AC has reviewed the Company’s risk assessment and based on the external auditor’s reports, is satisfied that there are adequate internal controls in the Company. The AC expects the risk assessment process to be a continuing process as it recognises the importance of sound internal control and risk management practices to good corporate governance. 8. Principle X: Accountability and Audit Principle XIV: Communication with Shareholders Principle XV: Greater Shareholder Participation The Company and the Group works towards timeliness and transparency in its disclosures to the shareholders and the public. In addition to the regular dissemination of information through SGXNET and the Frontline website , the Company also responds to enquiries from investors, analysts, fund managers and the mass media. The Company does not practice selective disclosure as all price-sensitive information is released through SGXNet. All shareholders of the Company receive a copy of the annual report and notice of AGM. The notice of AGM is also advertised in the newspapers. At the AGM, shareholders are given the opportunity to air their views and ask directors questions regarding the Company. To facilitate voting by shareholders, the Company’s articles allow shareholders to vote by appointing one (1) or more proxies. The Board of directors, management, as well as the external auditors attend the Company’s AGM to address any questions that shareholders may have. 6 Messrs Ernst & Young, who were succeeded by Messrs Baker Tilly TFWLCL on 17 February 2006.
frontline technologies corporation ltd annual report 2006 39 > corporate governance report (cont’d) 9. Dealing in Securities The Company has internal guidelines to provide guidance to key officers of the Company and its subsidiaries with regard to dealings in the Company’s securities in compliance with the Best Practices Guide on Dealings in Securities issued by the Singapore Exchange Securities Trading Limited. The Group’s directors and officers are not permitted to deal in the Group’s shares while in possession of price sensitive information and during the period commencing at least two (2) weeks before the announcement of the Group’s quarterly results; and one (1) month before the announcement of the Group’s half-yearly and full year results, and ending on the day of announcement of such results. 10. Statement of Compliance The Board confirms that for FY06, the Company has complied with the principal corporate governance recommendations set out in the Best Practice Guide issued by SGX-ST. 11. Material Contracts Except as disclosed in the Report of the Directors and the Financial Statements, the Company and its subsidiaries did not enter into any material contracts involving the interest of the directors or controlling shareholders in FY06. 12. Interested Person Transactions The Company has in place proper policies and procedures for the identification, approval and monitoring of transactions with interested persons (“IPTs”). All interested person transactions are subject to review by the AC. Currently, the Company is not required to have a general mandate from its shareholders in relation to IPTs as the aggregate value of IPT transactions is below the threshold level as set out in the SGX-ST Listing Manual. Pursuant to rule 907 of the SGX-ST Listing Manual: Name of Aggregate value of all IPTs during the financial year Aggregate value of all IPTs interested under review (excluding transactions less than $100,000 conducted under the person and transactions conducted under the shareholders’ shareholders’ mandate mandate pursuant to Rule 920) pursuant to Rule 920 (excluding transactions less than $100,000) Total NIL NIL 7 http://www.frontline.com.sg
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