FRENCKEN GROUP LIMITED
ANNUAL REPORT 2015
32
AUDIT COMMITTEE (CONT'D)
Principle 12 (Cont'd)
(k) generally undertake such other functions and duties as may be required by statute of the Listing Manual, and by such
amendments made thereto from time to time. In addition, all future transactions with related parties shall comply with
the requirements of the Listing Manual. As required by paragraph 1(9)(e) of Appendix 2.2 of the Listing Manual, the
Directors shall abstain from voting in any contracts or arrangements or proposed contracts or arrangements in which
they have a personal material interests.
The Audit Committee has the power to conduct or authorise investigations into any matters within the Audit Committee’s
scope of responsibility. The Audit Committee is authorised to obtain independent professional advice if it deems necessary
in the discharge of its responsibilities. Such expenses are to be borne by the Company.
The Company has in place a whistle-blowing policies and arrangement by which staff may, in confidence, raise concerns
about possible improprieties in matters of financial reporting or other matters. To ensure independent investigation of such
matters and for appropriate follow-up action, all whistle-blowing reports are to be sent directly to the Chairman of the Audit
Committee. Details of the whistle-blowing arrangements have been communicated to all staff of the Group.
The Audit Committee has full access to and co-operation from management and has full discretion to invite any Director
or Executive Officer to attend its meetings, and has been given reasonable resources to enable it to discharge its functions.
The Group engages different audit firms for its subsidiaries and the names of these audit firms are disclosed on pages 80
to 85 of this Annual Report. Both the Audit Committee and Board have reviewed the appointment of these audit firms and
are of the view that the appointments of these other audit firms would not compromise the standard and effectiveness of
the audit of the Company and the Group. Accordingly, the Company has complied with Rules 712 and 716 of the Listing
Rules of the SGX-ST.
For details of fees in respect of audit and non-audit services, please refer to Note 7(a) to the financial statements.
The Audit Committee has reviewed the range and value of non-audit services performed by the independent auditors and is
satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the independent
auditors. At the forthcoming Annual General Meeting of the Company, the Audit Committee has recommended to the
directors the nomination of Deloitte & Touche LLP for re-appointment as independent auditors of the Group.
During the year under review, the Audit Committee met with the independent auditors a total of five (5) times of which
once is without the presence of management.
INTERNAL AUDIT
Principle 13 The Company should establish an effective internal audit function that is adequately resourced and
independent of the activities it audits.
The Board believes that the existing system of internal controls is adequate and recognises that it is responsible for
maintaining a system of internal control processes to safeguard shareholders’ investments and the Group’s business and
assets. The effectiveness of the internal financial control systems and procedures are monitored by the management. The
Company’s internal functions are carried out in-house. The Audit Committee reviews the adequacy of the internal audit
function and its standing within the Company to ensure it is able to perform its function effectively and objectively.
During the year, the internal auditor carried out one (1) cycle each of internal audit for the Mechatronics Division in Asia
and Europe and two (2) cycles of internal audit for the IMS Division in Asia and the findings were presented to the Audit
Committee.
With the assistance of the internal and external auditors, our management has identified the main business processes and
the associated financial and operational risks, and have adopted recommendations made to address these risks. Based on
the review by the Audit Committee, the Board is satisfied that the internal controls and risks management process of the
Group are adequate to safeguard shareholders’ interest and the Company’s assets.
CORPORATE GOVERNANCE STATEMENT
(CONT’D)
