KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
38
Corporate Governance Report
The Group has established an Enterprise Risk Management (“
ERM
”) framework for identification of key risks within
the business and has adopted the use of risk register and summary of comfort matrices to document the identified
risks as well as taking appropriate measures to control and mitigate these risks. During the year, the Group has
formed a Management Risk Committee (“
MRC
”) which comprised of Management and executive officer from various
departments. MRC regularly reviews and report to and update ARC on the Group’s business and operational activities
in respect of the key risk control areas including financial, operational, compliance and information technology
controls and continues to apply appropriate measures to control and mitigate these risks. All significant matters
were highlighted to the Board and the ARC for further discussion. The Board and the ARC also work with the internal
auditors, the external auditors and the Management on their recommendations to institute and execute relevant
controls with a view to managing such risks.
The Company has engaged outsourced internal auditors, who has carried out internal audit reviews and perform gap
analysis on the ERM, as part of the annual internal audit plan approved by the ARC.
Based on the internal controls established and maintained by the Group, work performed by the internal auditors and
the external auditors, and reviews performed by the Management, the Board with the concurrence of the ARC, is of
the opinion that the Group’s risk management and internal control systems put in place during the financial year to
address financial, operational, compliance and information technology risks, are adequate and effective. The Board
has received assurances from the CEO and the Chief Financial Officer (“
CFO
”) that:
(a)
the financial records of the Group have been properly maintained and the financial statements for FY2015 give
a true and fair view of the Group’s operations and finances, and are prepared in accordance with the relevant
accounting standards; and
(b)
the Company’s risk management and internal control systems are adequate and effective.
The Board notes that the system of internal controls is designed to manage, rather than to eliminate, the risk of failure
in achieving business objectives, and that no system of risk management and internal control can provide absolute
assurance against the occurrence of errors, losses, fraud or other irregularities and the containment of business risk.
Nonetheless, the Board believes its responsibility of overseeing the Group’s risk management framework and policies
are well supported. The Board will look into the need for establishment of a separate board risk committee at the
relevant time.
Audit & Risk Committee
Principle 12: The Board should establish an Audit Committee with written terms of reference which clearly set out
its authority and duties.
The ARC currently comprises three (3) members, all of whom, including the ARC chairman, are Independent Directors:
Mr Ho Boon Chuan Wilson - Chairman
Mr Douglas Owen Chester - Member
Mr Ong Sie Hou Raymond - Member
The Board is of the view that the ARC members are appropriately qualified and have sufficient accounting and/or
related financial management expertise and experience to discharge the ARC’s responsibilities.
The ARC meets on a quarterly basis and plays a key role in assisting the Board to review significant financial reporting
issues and judgments to ensure the quality and integrity of the accounting reports, the audit procedures, internal
controls, financial statements and any announcements relating to the Group’s financial performance, as well as the
risk management functions.
