INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
58.
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
The external auditors of the Group’s subsidiaries and associated companies are disclosed on page 115, 118 and 120 of this
Annual Report. The AC & RMC and the Board are satisfied that the appointment of different auditors for its subsidiaries and
associate companies would not compromise the standard and effectiveness of the audit of the Company, and are of the opinion
that the Company is in compliance with Rules 712 and 716 of the SGX-ST Listing Manual.
The AC & RMC has recommended for Ernst & Young LLP to be re-appointed as the external auditors of the Company at the
forthcoming AGM.
INTERNAL AUDIT [PRINCIPLE 13]
The IAD is led by Mr Rogers H. Wirawan, who reports directly to the Chairman of the AC & RMC on all internal audit matters.
The IAD plans its internal audit schedules in consultation with the Management before it submits the plan to the AC & RMC
for approval. The IA conducts its audit in accordance with the guidance and standard for the Professional Practice of Internal
Auditing set by the Institute of Internal Auditors.
The IAD is independent of the activities it audits. Its duties and responsibilities with regard to risk management and internal
controls are as follows:
•
review the risk profile of the Company;
•
identify and recommend actions to eliminate or mitigate risks so as to improve the risk profile;
•
recommend risk parameters for the Company’s operations;
•
review risk mitigation efforts and related costs;
•
monitor the mitigation efforts and risk parameters; and
•
establish and maintain a risk reporting and risk monitoring framework.
The IAD operates within the framework set out in the IA Charter and Code of Ethics approved by the Management and the AC
& RMC. It implements a systematic and disciplined approach to evaluate and improve the effectiveness of risk management,
controls and governance processes. As part of the audit plan, IAD performs independent reviews of the risks and controls
identified by the ERM team so as to provide reasonable assurance to Management and the AC & RMC that the key risks and
controls are adequately monitored and addressed.
During the year, the IAD adopted a risk-based auditing approach that focused on material internal controls, whereby audits
were conducted on high-risk areas of significant business units. The IAD’s key findings and recommendations were presented
and discussed at the quarterly meetings with the AC & RMC. The progress of the key actions agreed by the Management was
monitored and reviewed by the AC & RMC.
ENTERPRISE RISK MANAGEMENT
The Group operates in a VUCA (Volatile, Uncertain, Complex, Ambiguous) environment due to various factors, such as
regulatory changes on a local, national and cross-border level, political dynamics on a country and regional level, security
threats, pandemic risks, increasing number of natural disasters, the El Nino phenomenon, intense public scrutiny, aggressive
competition, volatile commodity prices, rising interest rates, and evolving consumer needs. As such, the Group is fully committed
to a comprehensive approach of managing risks across its operations. This has enabled the Group to be more proactive and
prepared in dealing with and addressing the various challenges and uncertainties faced in a tough and competitive business
environment. At the same time, this has allowed the Group to promote and implement good corporate governance.
Integrated Risk Management Framework
The ERM framework continues to underscore the Group’s success in effective risk management. The framework coordinates
the “Lines of Defence” across all operating and functional units that enables the Group to maintain vigilance and oversight of
the operations for timely and accurate identification, assessment, mitigation, reporting and monitoring of risks that can have
an adverse impact on the business drivers and the Group’s ability to achieve business results.
