Annual Report 2005 - Leeden Limited

Corporate Governance Report15Principle 11 : Audit CommitteePrinciple 12 : Internal ControlsAudit Committee (AC)The AC comprises three board members:Tony Chan Chairman (Independent Non-Executive)Leslie Struys(Independent Non-Executive)Ong Nai Pew(Independent Non-Executive)The AC members have had many years of experience in senior management positions in both the fi nancial and industrial sectors. All membersare fi nancially literate and have accounting or related fi nancial management expertise or experience. The AC members are all non-executiveand independent Directors.ACE DYNAMICS LIMITEDThe role of the AC is regulated in its Terms of Reference which has been approved by the Board. The Terms of Reference defi nes the purpose,authority and responsibilities of the AC. The AC is authorized to investigate any matters specifi ed in the Terms of Reference.During the fi nancial year, the AC met three times and performed the following key functions:• reviews with the internal auditors, the scope and the results of internal audit procedures and their evaluation of the internal controlsystems and any signifi cant fi nding;• reviews with the external auditors, their audit plan, evaluation of the accounting controls, audit reports, risk assessment and any otherrelevant matters;• reviews the interim and annual fi nancial statements before submission to the Board for release to SGX-ST;• reviews and makes recommendations to the Board on the appointment of external auditors;• reviews interested person transactions, if any, as set out in the Listing Rules of SGX-ST; and• reviews all non-audit services provided by the fi rm of external auditors, if any, to determine if the provision of such services wouldaffect the independence of the external auditors.The AC has the express power to conduct or authorize investigations into any matters within its Terms of Reference, has full access to andco-operation by the Management and full discretion to invite any Director or executive offi cer to attend its meetings. All major fi ndings andrecommendations are brought to the attention of the Board of Directors.In performing its functions, the AC may also meet with internal and external auditors without the presence of the Company’s management atleast once annually. Such meetings allows for a more open discussion on any issues of concerns.During the year, AC has reviewed the effectiveness of the Group’s material internal controls, including fi nancial and operational compliancecontrols, and risk management. The processes used by the AC to review the effectiveness of the system of internal control and riskmanagement include discussions with management and auditors on the risks identifi ed and the review of signifi cant issues arising therefrom.The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfi ed that the nature and extent of suchservices would not affect the independences of the external auditors.The Directors are of the opinion that, in the absence of any evidence to the contrary, the system of internal controls provides reasonable, butnot absolute assurance that the Group will not be adversely affected by any event that could reasonably be foreseen, as it strives to achieveits business objectives.The Company has, to the best of its knowledge, complied with the Best Practices Guide in relation to the role and responsibilities of the AuditCommittee issued by the SGX-ST.ANNUAL REPORT 2005