NTUC Income AR 2017

CORPORATE GOVERNANCE The AC reviewed its terms of reference and the Internal Audit Charter to ensure they are adequate and relevant. Income has a whistle-blowing policy whereby staff could raise concerns about possible improprieties in matters of financial reporting or other matters in confidence. The AC reviewed the arrangements in place for independent investigation of such matters and for appropriate follow-up action. The Chief Internal Auditor has a direct reporting line to the Chairman of the AC. The Internal Audit (IA) function resides in-house and is independent of the activities it audits. The IA function is staffed by suitably qualified executives. During the year, an external quality assurance review was conducted to ensure that IA’s activity conforms to the International Standards for the Professional Practice of Internal Auditing. On a quarterly basis, management reported to the AC significant related party transactions, contingent liabilities and regulatory compliance issues. In performing its functions, the AC had met up at least annually with the internal and external auditors without the presence of management. The AC believes that, in the absence of evidence to the contrary, the system of internal controls maintained by the Co-operative’s management which was in place throughout the financial year up to the date of this report provides reasonable, but not absolute, assurance against material financial misstatements or loss, and include the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislation, regulation and best practices, and the identification and containment of financial risk. The AC notes that no system of internal controls can provide absolute assurance against the occurrence of material errors, poor judgment in decision-making, human error, losses, fraud or other irregularities. Investment Committee The Investment Committee (IC) comprises seven members as follows: Chairman Lau Wing Tat Members Kee Teck Koon Choong Tuck Oon Audrey Chin (External member) Ken Ng (Chief Executive) Mark Wang (Chief Investment Officer) Lau Sok Hoon (Appointed Actuary) The IC exercises the authority delegated by the Board in ensuring the Co-operative’s investment activities are managed in a prudent manner. The key duties and responsibilities of the IC are to: • Formulate, establish and recommend the Investment Policy and Strategic Asset Allocation (SAA) for approval by the Board; • Review the Investment Policy and performance on a regular basis so that it remains appropriate, recognising among other things, changes in business profile and the economic environment; • Ensure the Investment Policy is consistent with the asset-liability management strategies required to support new and existing products; • Ensure the Investment Policy of the Participating Fund is consistent with Income’s bonus and dividend policy; • Ensure resources dedicated to investment activities are sufficient to implement and manage the approved Investment Policy and any other activities requested by the Board; • Implement and maintain adequate risk management systems and controls in respect of investments of insurers; • Oversee all ILP funds and reviewing fund performance on a regular basis; • Approve the limits and guidelines outlined in the Investment Policy, which have been delegated by the Board to the IC, subject to Income’s overall risk limits set by the Risk Management Committee (RMC); • Approve margin transactions and short positions as outlined in the Investment Policy. ANNUAL REPORT 2017 NTUC INCOME INSURANCE CO-OPERATIVE LIMITED 20