Page 38 - Forterra

36 ANNUAL REPORT 2012
CORPORATE GOVERNANCE
REPORT
Whilst no system can provide absolute assurance against material loss or financial mis-statement, Forterra’s
internal financial controls are designed to provide reasonable assurance that assets are safeguarded, that proper
accounting records are maintained, and that financial information used within the business and for publication
is reliable. In designing these controls, the Board of the Trustee-Manager has regard to the risks to which the
business is exposed, the likelihood of such risks occurring and the costs of protecting against them.
Financial risk management is highlighted in Note 28 on pages 99 to 104 of the Annual Report.
COCG Code Principle 12: Audit Committee
The Audit Committee is appointed by the Board of the Trustee-Manager and is composed of four non-executive
members, three of whom (including the Chairman of the Audit Committee) are required to be directors
independent from management and business relationships with the Trustee-Manager. The members of the Audit
Committee are:
1. Mr. Graham Sugden (Chairman)
2. Mr. Yoon Wai Nam
3. Dr. Tan Khee Giap
4. Mr. Xu Sitao
The Board of the Trustee-Manager is of the view that the Audit Committee has sufficient management expertise
and experience amongst its members to discharge the functions of the Audit Committee. The Audit Committee
may invite any Director or management staff to attend its meetings and is also authorised to seek external
professional advice to enable it to discharge its functions.
The principal role of the Audit Committee is to monitor and evaluate the effectiveness of the Trustee-Manager’s
internal controls. The Audit Committee also reviews the quality and reliability of information prepared for
inclusion in the financial reports, and is responsible for the nomination of external auditors and reviewing the
adequacy of external audits in respect of cost, scope and performance. The Audit Committee’s responsibilities
also include, but are not limited to, the following:
(i) monitoring the procedures established to regulate Interested Person Transactions, including ensuring
compliance with the provisions of the Listing Manual relating to Interested Person Transactions;
(ii) reviewing external audit reports to ensure that where deficiencies in internal controls have been identified,
appropriate and prompt remedial action is taken by management;
(iii) reviewing the financial statements to ascertain that the guidelines and procedures established to monitor
Interested Person Transactions and conflicts of interest have been complied with;
(iv) resolving any conflicts of interest which may arise;
(v) ensuring that the internal audit function is adequately resourced and has appropriate standing within
Forterra;
(vi) monitoring the procedures in place to ensure compliance with applicable legislation, the Listing Manual
and the BTA;
(vii) nominating external auditors;
(viii) reviewing the nature and extent of non-audit services performed by external auditors;
(ix) examining with management the effectiveness of financial, operating and compliance controls;
(x) reviewing, on an annual basis, the independence and objectivity of the external and internal auditors;
(xi) meeting with external and internal auditors, without the presence of management, at least on an annual
basis;
(xii) commissioning an annual internal controls audit, to be discontinued only after the Audit Committee is
satisfied with the Forterra Group’s internal controls are robust and effective enough to mitigate any
internal control weaknesses, and thereafter to carry out such internal controls audit as and when the
Audit Committee deems fit in order to satisfy itself that the Forterra Group’s internal controls remain
robust and effective;