The ARC is also authorised to investigate any matter within its terms of reference and has full access
to and co-operation of the management and full discretion to invite any Director or executive officer
to attend its meetings, and reasonable resources to enable it to discharge its functions properly. The
ARC meets annually with the internal auditors and the external auditors, without the presence of the
Management to review the adequacy of audit arrangements, with particular emphasis on the scope
and quality of their audits, and the independence and objectivity of the internal and external auditors.
The aggregate amount of fees paid or payable to the external auditors of the Company, broken down
into audit and non-audit services during the financial year ended 31 December 2015 are as follows:–
Audit fees: 217,000
Non-audit fees: 7,000
The ARC, having reviewed all non-audit services provided by the external auditors to the Group,
is satisfied that the nature and extent of such services would not affect the independence of the
external auditors. In the ARC’s opinion, Ernst & Young LLP is suitable for re-appointment and it has
accordingly recommended to the Board that Ernst & Young LLP be nominated for re-appointment as
the external auditor of the Company at the forthcoming AGM.
The Company is in compliance with Rule 712, Rule 715 and Rule 716 of the Listing Manual in relation
to its external auditor.
It is the Company’s practice for the external auditor to present to the ARC its audit plan and with
updates relating to any change of accounting standards impacting on the financial statements before
an audit commences. During the financial year under review, the changes in accounting standards
did not have any impact on the Group’s financial statements.
3.3
Whistle-Blowing Policy
The Group has adopted a constructive whistle-blowing policy and guideline in order to detect and
deter any fraud or deliberate error in the preparation, evaluation, review or audit of any financial
statements, financial reports and records of the Company.
Demonstrating its pledge to good corporate governance, the Group provides an avenue for employees
to bring their complaints responsibly to report any possible improprieties in matters of financial
reporting or other matters that they may encounter to the ARC or any other committees established
by the ARC for such purpose without fear of reprisal. The establishment of the whistle-blowing
structure also augments the Group’s ability to detect potential fraud, providing another level of
comfort and assurance to investors.
Under the whistle-blowing policy, all concerns expressed anonymously will be investigated although
consideration will be given to the seriousness of the issue raised, the credibility of the concern and
the likelihood of confirming the allegation from attributable sources. In addition, every effort will
be made to protect the complainant’s identity, if so requested, so long as it is compatible with a
proper investigation.
33
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
CORPORATE
GOVERNANCE
