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EN_Tipco_Annual Report 2014

TIPCO FOODS PUBLIC COMPANY LIMITED PAGE 086/ 087 1.1 Internal Control and Internal Audit The Board of Directors established internal control system to cover all aspects including financial management, operations, compliance with relevant laws, rules and regulations, and risk management. In addition, proper checks and balances system and an effective internal audit system were adopted in order to enhance the efficiency of administration and asset management as well as to ensure fair compensation and returns for all stakeholders. The Company has defined the scope of authority and responsibilities of executives and employees according to the hierarchical order, established written operating procedures, developed employees at managerial level and talents through the Internal Quality Audit ISO 9001: 2000 program in support of cross-functional audit, and established an independent internal audit function. From 2004 onwards, the Company has engaged an external firm to conduct internal audits for the Company. The internal auditor jointly considered internal audit plans with the Audit Committee and directly reports to the Audit Committee. The Board of Directors adjusted the scope of authority and responsibilities of the Nomination and Remuneration Subcommittee to promote fairness of the selection of competent and qualified candidates for the position of director and managing director as well as to ensure that the remuneration for directors and employees is fair and based on performance. In addition, the Corporate Governance Subcommittee has been established to be responsible for the formulation of the corporate governance policy and code of business ethics. The policy and the result of its implementation have been periodically reviewed. The Company has fostered the culture of good corporate governance as its strongly believes in the principles of quality, integrity, transparency and equitable treatment which will lead to the achievement of sustainable business growth. 1.2 Internal Control System At the Board of Directors Meeting No. 1/2014 held on 19 February 2014 where 3 independent directors were also present, the Board of Directors evaluated the Company’s internal control system and approved the evaluation form prepared by the management as well as the Audit Committee’s report. Details can be summarized as follows: Operational control: The Company has clearly defined the authority and operating procedures applicable to operating officers and executives in writing to facilitate audits. Utilization of the Company’s resources and assets was controlled and monitored to ensure benefits. Also, the budget management system is implemented and feasibility study is conducted for investment projects before asset investments are made. To ensure effectiveness, the Company adopts the monitoring and tracking system to analyze gaps between the planned budget and the actual results. Also, there is a clear segregation of duties between operating officers, controllers and assessors to promote proper checks and balances. Internal controls are enforced for financial management and financial reports are presented to division heads concerned. Internal audit: The Company has contracted an external firm to conduct internal audits for the Company with the aim of ensuring that its key operations and financial activities are undertaken in accordance with predetermined guidelines. Compliance with the laws and relevant requirements has been audited. To promote the internal auditor’s independence and abilities to INTERNAL CONTROL AND RISK MANAGE-MENT


EN_Tipco_Annual Report 2014
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