Corporate
Governance
Corporate
Governance
61
BAKER TECHNOLOGY LIMITEDANNUAL REPORT 2012
60
BAKER TECHNOLOGY LIMITEDANNUAL REPORT 2012
The AC meets at least five times a year to carry out its
role of reviewing the financial reporting process, the
system of internal controls, enterprise risk management,
budget and the audit process.
TheAC has authority to investigate anymatters within its
Termsof Referenceandhas full access toandcooperation
fromManagement, in addition to its direct access to the
external auditors. The AC also has full authority to invite
any director or executive officers to attend its meetings.
In discharging its functions, the AC reviews the overall
scope of both internal and external audits and the
assistance given by the Company’s officers to the
auditors. It meets with the Company’s internal and
external auditors to discuss the results of their respective
examinations and their evaluation of the Company’s
system of internal accounting and financial controls. The
AC’s role also includes reviewing of interested person
transactions to ensure that theyare carriedout onnormal
commercial terms and are not prejudicial to the interests
of the Company and its minority shareholders. The AC
also reviews the consolidated financial statements and
the auditors’ report before submission to the Board.
The AC has reviewed the non-audit services provided to
theGroupby the external auditors, Ernst &Young LLP for
FY2012, and is of the opinion that the provision of such
non-audit services does not affect their independence
and objectivity of the external auditors. Accordingly, the
AC has recommended to the Board the nomination of
Ernst &Young LLP for re-appointment as external auditors
at the forthcomingAGM.
The Company confirms that it has complied with Rules
712 and 715 of the ListingManual issued by SGX-ST in
relation to the external auditors.
At least once a year, the ACmeets with the internal and
external auditorswithout thepresenceofManagement to
review anymatter that might be raised privately.
The Company has a Code of Conduct Policy (“CCP”)
to regulate the ethical conduct of its employees. The
CCP also extends to Directors of the Company and all
consultants and agents engaged by the Group for the
purpose of representing the Group in certain areas of
works. The Company has also a whistle blowing policy,
which serves to encourage and provide a channel to
employees to report in good faith and in confidence,
without fear of reprisals, concerns about possible
fraud, improprieties in matters of financial reporting or
other matters. The objective for such arrangement is to
ensure independent investigation of suchmatters and for
appropriate follow-up actions.
InternalControls
Principle12:
The Board should ensure that themanagement maintains
a sound system of internal controls to safeguard the
shareholders’ investments and the company’s assets.
The AC ensures that there is periodic review of the
effectiveness of the Company’s internal controls,
including financial, operational and administrative
controls and risksmanagement. This review is conducted
by the Company’s internal auditors, who present their
findings to the Management and the AC. The AC also
considers internal control findings reported by the
external auditors, if any, as part of their review. Any
material non-compliance or failure in internal controls
and recommendations for improvements are reported
to the AC. The AC also reviews the effectiveness of the
actions taken by Management on the recommendations
madeby the internal andexternal auditors in this respect.
The Company has in place an enterprise-wide risk
management framework (“ERM Framework”) to enhance
its riskmanagement capabilities. It has identified the key
risks facing the Group and action plans are in place to
mitigate them.
The adequacy of the ERM Framework is periodically
reviewed by Management to ensure that the risk
management practices are up-to-date.
The internal controls aredesigned tomanage rather than
eliminatebusiness risks. The Board, with the concurrence
of theAC, is of the opinion that the internal controls and
systemsmaintainedbyManagement during the financial
year and up to the date of this report are adequate in
addressing financial, operational and compliance risks
and to meet the current scope of the Group’s business
operations. The AC and the Board note that no system
of internal controls is capable of providing absolute
assurance against the occurrence of material errors,
poor judgment in decision-making, human error, losses,
fraud or other irregularities.
InternalAudit
Principle13:
The Company should establish an internal audit function
that is independent of the activities it audits.
The Company has out-sourced its internal audit function
to RSM Ethos Pte Ltd (“RSME”), a firm specialising in
governance, risk and consulting. Members of RSME are
suitably qualified and have the relevant experience.
TheAC is satisfied that the internal auditors havemet the
standards set by internationally recognised professional
bodies including the Standards for the Professional
Practice of Internal Auditing set by the Institute of Internal
Auditors.
The internal auditors report directly to theAC on internal
audit matters. The AC reviews the internal audit reports
and activities periodically and the effectiveness of the
Group’s internal audit function. TheACalso reviews and
approves the internal audit plan. The AC is of the view
that the internal audit function is adequately resourced
to perform its functions and has, to the best of its ability,
maintained its independence from the activities that it
audits.
COMMUNICATIONWITHSHAREHOLDERS
Regular, Effectiveand Fair
CommunicationwithShareholders
Principle14:
Companies should engage in regular, effective and fair
communicationwith shareholders.
The Company is committed to regular, fair and timely
communicationwithmembers of the investing community
and investing public as such practices help to uphold its
guiding principles of transparency and accountability. It
has engagedNRACapital Pte Ltd as its external Investor
Relations (“IR”) agency to support it in the communication
process. The IR team regularly meets with investors
through face-to-facemeetings and email communications
to address investor queries and to update them on
the latest corporate developments. (For details on the
Group’s IRactivities, please refer to the Investor Relations
page on the Annual Report)
All material information, including quarterly financial
performance, positionandprospects aswell asmaterials
from briefings, are disclosed and released regularly
and in a timely manner via SGXNet onto the SGX-ST
website before dissemination to the financial media. This
information is also uploaded on the Investor Relations
pageon theCompany’swebsiteat
sg. The Company’s website serves as a comprehensive
and easy-to-use source of information to shareholders.
Among other things, it contains the Company’s publicly
disclosed financial information, annual reports and
announcements.
