BUILDING LANDMARKS, CHARTING GROWTH
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Annual Report 2015
Guideline 11.3 : Board’s opinion on the adequacy
and effectiveness of risk management and internal
control systems.
The Board recognises the importance of a robust risk
management and internal control system to safeguard
the assets of Perennial and the Shareholders’
interests. The Board affirms its overall responsibility for
Perennial’s systems of risk management and internal
control, and for reviewing the adequacy and integrity
of these systems.
For the Period, the Board has received assurance from
the CEO and CFO that financial records of Perennial
have been properly maintained, that the financial
statements for the financial period ended
31 December 2015 give a true and fair view of
Perennial’s operations and financial results and that
the internal controls (including financial, operational,
compliance and IT controls) and risk management
systems of Perennial are adequate and effective in
addressing the risks of the group in its current
business environment.
Based on the ERM framework and internal controls
established and maintained by Perennial, work
performed by external and internal auditors, reviews
performed by the Management and assurance
received from the CEO and CFO, the Board, with the
concurrence of the ARC, is of the opinion that
Perennial’s risk management and internal control
systems were adequate and effective as at
31 December 2015 to address the financial,
operational, compliance and IT risks of the group.
However, all internal control and risk management
systems contain inherent limitations and no system of
internal controls and risk management can provide
absolute assurance against the occurrence of material
errors, poor judgment in decision-making, human
error, losses, fraud or other irregularities. Owing to
such inherent limitations, the Board notes that the
systems of risk management and internal controls
established by the Management provide reasonable,
but not absolute assurance that Perennial will not be
adversely affected by any event that can be reasonably
foreseen or anticipated, as it strives to achieve its
business objectives. The Board will ensure that should
any significant internal control failings or weaknesses
arise, necessary remedial actions will be swiftly taken.
Guideline 11.4 : Establishment of a separate Board
Risk Committee
The Board delegates the responsibility of overseeing
Perennial’s risk management framework and policies,
risk profile and the effectiveness of Perennial’s risk
management system to the ARC. In discharging this
responsibility, the ARC regularly reviews the key
organisational risks and the robustness of Perennial’s
risk management systems to assess the adequacy
and effectiveness of the risk management policies and
systems. The ARC also determines the nature and
extent of the significant risks which the Board is willing
to assume in achieving Perennial’s strategic objectives.
AUDIT COMMITTEE (GUIDELINE 12)
Guideline 12.1 : Composition of the ARC
Guideline 12.2 : Qualification of the ARC
For the Period, the ARC was chaired by Mr. Chua
Phuay Hee and other members of the ARC were Mr.
Eugene Paul Lai Chin Look, Mr. Lee Suan Hiang and
Mr. Ooi Eng Peng. With effect from 5 February 2016,
Mr. Chua Phuay Hee stepped down as Chairman of
the ARC and Mr. Ooi Eng Peng was appointed as the
Chairman. Mr. Chua remains as a member of the ARC.
All members of the ARC are independent non-
executive Directors. Mr. Chua Phuay Hee and Mr. Ooi
Eng Peng have the relevant accounting and related
financial management expertise and experience. The
Board considered that Mr. Eugene Paul Lai Chin Look
and Mr. Lee Suan Hiang have sufficient financial
management knowledge and experience to discharge
their responsibilities as ARC members. The ARC’s
terms of reference are set out on pages 158 and 159
of this report.
Guideline 12.3 : Authority of the ARC
The ARC has full access to the Management,
reasonable resources to enable it to discharge its
functions properly and the explicit authority to
investigate any matter within its terms of reference.
The Management is required to provide the fullest
co-operation in furnishing information and resources,
and in implementing or carrying out all requests made
by the ARC. The ARC also has direct access to the
internal auditors and external auditors, and has full
discretion to invite any Director or executive officer to
attend its meetings. Similarly, both the internal auditors
and external auditors are given unrestricted access to
the ARC.
