Singapore Airlines 2006 Annual Report Download - page 41

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Singapore Airlines Annual Report 05/06
CORPORATE GOVERNANCE REPORT
For the period 1 April 2005 to 31 March 2006
(c) Internal Audit
The ARC reviewed the scope of internal audit work and its audit programmes; reviewed the major fi ndings during
the year and Management’s responses thereto; and ensured the adequacy of the internal audit function.
(d) Risk Management
The ARC reviewed with Management, and the internal and external auditors, the effectiveness of the Company’s
material controls, including fi nancial, operational and compliance controls, and risk management in safeguarding
shareholders’ investments and the Company’s assets.
(e) Interested Person Transactions
The ARC reviewed interested person transactions as stipulated in the SGX-ST Listing Manual and the Shareholders’
Mandate obtained at the last Annual General Meeting.
The ARC has full access to and co-operation of Management. The ARC also has full discretion to invite any director or
executive offi cer to attend the meetings, and has been given adequate resources to discharge its functions.
During the year, the ARC met with the internal and external auditors without the presence of Management.
The ARC has undertaken a review of the fees and expenses paid to the auditors, including fees paid for non-audit
services, during the year and is of the opinion that the auditor’s independence has not been compromised.
In the opinion of the Directors, the Company complies with the Code’s guidelines on Audit Committees.
Internal Controls; Internal Audit (Principles 12 and 13)
The Internal Audit Department (IAD) is an independent department that reports directly to the Audit & Risk Committee.
The IAD assists the Committee and the Board by performing regular evaluations of the Company’s internal controls,
fi nancial and accounting matters, compliance, business and fi nancial risk management policies and procedures, and
ensuring that internal controls are adequate to meet the Company’s requirements. The Internal Audit Department meets
or exceeds the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.
It is the opinion of the Board that, in the absence of evidence to the contrary, the system of internal controls maintained
by the Management and in place throughout the fi nancial year 2005-06, provides reasonable, but not absolute,
assurance against material fi nancial misstatements or loss, and include the safeguarding of assets, the maintenance of
proper accounting records, the reliability of fi nancial information, compliance with appropriate legislation, regulations
and best practices, and the identifi cation and containment of fi nancial, operational and compliance risks. The Board
notes that all internal control systems contain inherent limitations and no system of internal controls could provide
absolute assurance against the occurrence of material errors, poor judgement in decision-making, human error, losses,
fraud or other irregularities.
A dedicated Risk Management Department looks into and manages the Company’s risk management policies. The Risk
Management Report can be found in page 32 of this Report.
Communication with Shareholders (Principles 14 and 15)
The Company believes in prompt disclosure of pertinent information. It values dialogue with both retail and institutional
shareholders, and holds media briefi ngs when announcing half-yearly and year-end results. The proceedings are
concurrently broadcast live via webcast. Media briefi ngs are also held as and when necessary. Additionally, all fi nancial
results as well as price-sensitive information are released through various media which includes press releases and
SGXNET releases posted on the Company’s website, at www.singaporeair.com. The Company’s Investor Relations
Department meets with key institutional investors on a regular basis, as well as answers queries from shareholders from
time to time.
The Board members always endeavour to attend shareholder meetings where shareholders are given the opportunity to
raise questions and clarify issues they may have relating to the resolutions to be passed, with the Board. The Chairmen
of the various Board Committees or members of the Board Committees standing in for them, as well as the external
auditors, would be present and available to address questions at these meetings.