Changes in Legislation (Indonesia)
A significant part of the Group’s facilities are in Batam, Indonesia.
The business environment in Indonesia is good and as has been the case
for the last decade is getting even better. However, if there is a reversal
in this trend for political or other reasons, the Group’s business may be
adversely affected.
Currency Risk
Foreign currency exchange effects could be volatile. Examples include
changes in the S$ against the US$, Euro and Indonesian Rupiah.
Whilst the Group tries to bill in S$, the world quotes in US$ and many
specialist equipment is priced in Euro.
The Board, with the concurrence of the AC, after carrying out an independent
review, is of the opinion that the Group’s internal controls and riskmanagement
are adequate and effective to address the financial, operational, compliance
and information technology risks for the nature and size of the Group’s assets.
This assessment is based on 1) the Group’s framework of management
controls in place, 2) reviews and work performed by the internal auditors
and external auditors on the internal controls maintained by the Group
and 3) assurances obtained from the Chief Executive Officer and Group
Financial Controller.
Internal controls, because of its inherent nature, can only provide reasonable
but not absolute assurance in meeting the intended control objectives.
The management will continue to work on improving the standard of
internal controls, corporate governance and the mitigation of high risk
areas identified.
For the financial year under review, the Board has received assurance from
the Chief Executive Officer and Group Financial Controller that:
(a) the financial records of the Group have been properly maintained
and the financial statements give a true and fair view, in all material
respects, of the Group’s operations and finances; and
(b) the risk management and internal control systems (other than in the
subsidiary – VOSTA LMG acquired in FY2013) are adequate and
operating effectively in all material respects given its current business
environment. Certain internal control weakness that the external
auditors become aware of during the course of their audit have been
communicated to the AC. Management will also follow up on the
external auditors’ recommendations in effort to strengthen the internal
control system in VOSTA LMG.
Governance
Disclosure Guide
Guideline 11.3:
(a) In relation to the major
risks faced by the
Company, including
financial, operational,
compliance,
information technology
and sustainability,
please state the bases
for the Board’s view
on the adequacy and
effectiveness of the
Company’s internal
controls and risk
management systems.
(b) In respect of the past 12
months, has the Board
received assurance
from the CEO and
the CFO as well as
the internal auditor
that: (i) the financial
records have been
properly maintained
and the financial
statements give true
and fair view of the
Company’s operations
and finances; and
(ii) the Company’s
risk management
and internal control
systems are effective?
If not, how does the
Board assure itself
of points (i) and (ii)
above?
CORPORATE GOVERNANCE REPORT
46
ASL Marine Holdings Ltd.
Annual Report 2016
