co r por at e gov e r n a n ce
Corporate G ov e r n a n c e
In terms of internal controls, independent audits are conducted by the external and internal auditors on the effectiveness of the Group’s key internal control systems. The AC is responsible for reviewing the audit reports and assessing the effectiveness of the actions taken by Management in resolving any lapses or weaknesses based on the recommendations made by the external and internal auditors, and taking into account any Management’s views. For the financial year ended 31 December 2013, the Board has received assurance from CEO and CFO that the financial records have been properly maintained and the financial statements give a true and fair view of StarHub’s operations and finances, and that StarHub’s risk management and internal control systems (including financial, operational, compliance and information technology controls) are adequate and effective. Based on the risk management system and internal controls established and maintained by the Group, reviews performed by Management, as supported by findings by external and internal auditors, and relevant assurance by CEO and CFO pursuant to the Code, the Board, with the concurrence of the AC, opines that the risk management system and internal controls, including financial, operational, compliance and information technology controls, are adequate and effective in meeting the needs of the Group in its current business environment and scope of operations.
The AC comprises the following Directors: • Mr Kua Hong Pak (AC Chairman); • Mr Nihal Vijaya Devadas Kaviratne CBE (independent Director); • Mr Teo Ek Tor (independent Director); and • Mr Lim Ming Seong. The AC held four meetings during the financial year ended 31 December 2013, and met with the external auditors without Management at least once. All AC members are non-executive Directors, the majority of whom (including the AC Chairman) are independent Directors. The members collectively have strong accounting and related financial management expertise and experience. The AC’s key responsibilities include: • reviewing and approving quarterly and year-end financial results announcements and financial statements, before recommending to the Board for approval; • monitoring compliance with relevant statutory and listing requirements to ensure the integrity of the Group’s
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financial statements, including the relevance and consistency of the accounting principles adopted; reviewing and reporting to the Board at least annually the adequacy and effectiveness of StarHub’s internal controls, including financial, operational and compliance controls; reviewing the effectiveness of the Group’s internal audit function; reviewing the scope and results of the external audit, and the independence and objectivity of the external auditors (with regard to the nature, extent and cost of non-audit services provided by the external auditors during the financial year); reviewing interested person transactions to ensure compliance with the SGX-ST Listing Manual and the Shareholders’ Mandate that is renewable annually; making recommendations to the Board on the proposals to the shareholders on the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditor; commissioning and reviewing findings of internal investigations into suspected fraud, irregularity or failure of internal controls or violation of any law that is likely to have a material impact on the Group’s results; and reviewing StarHub’s Whistle Blowing Policy and the arrangements therein by which employees of StarHub and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters, and such concerns will be independently investigated and appropriate follow-up action(s) will be taken.
The AC has explicit authority to investigate any matter within its terms of reference, with full access to and co-operation by Management. The AC also has full discretion to invite any Director or executive officer to attend its meetings, and to require Management to provide it with such reasonable resources to enable it to discharge its functions properly. The AC performed a review of the independence and objectivity of the external auditors, and also a review of the volume and type of non-audit services provided by the external auditors during the financial year ended 31 December 2013. The aggregate amount of external auditors’ fees for financial year ended 31 December 2013 and the breakdown for the audit and non-audit services are set out in Note 19.3 to the Financial Statements on page 157 of the Annual Report. Based on the information, the AC is satisfied that the independence of the external auditors has not been compromised by the provision of the non-audit services and that Rules 712 and 715 of the SGX-ST Listing Manual have been complied. Accordingly, the AC has recommended to the Board that KPMG LLP be nominated for re-appointment