Annual Report 2016
45
Corporate Governance Statement
(Cont’d.)
PRINCIPLE 5: UPHOLD INTEGRITY IN FINANCIAL REPORTING
Compliance with Applicable Financial Reporting Standards
The Board aims to present a balanced and understandable assessment of the Company’s and the Group’s position and
prospects in the various financial reports to the shareholders, investors and regulatory authorities. The assessment is
primarily provided in the annual report through the Chairman’s and GMD’s Statements, the audited financial statements
and the quarterly results announcement.
The Audit Committee reviews the integrity and reliability of the quarterly financial statements and audited financial statements
prior to recommending to the Board. The GMD, Finance Director, Head of Financial Reporting and Investor Relations, Risk
Management Manager, external auditors and internal auditors are invited to participate in the Audit Committee Meeting
periodically and as and when required.
The Audit Committee also meet with the external auditors without the presence of any Executive Directors and management
twice in the financial year 2016 to discuss any matters that the Audit Committee members and the external auditors may
wish to discuss.
In presenting the annual financial statements and the quarterly announcements to shareholders, the Board has taken
reasonable steps to ensure that the financial statements are true and fair reflection of the Group’s position and prospects.
This also applies to circulars to shareholders and other documents that are submitted to the authorities and regulators.
Directors' responsibility statement in respect of the preparation of the audited financial statements is set out on page 48 of
this Annual Report.
Assessment of Suitability and Independence of External Auditors by the Audit Committee
The Company, through the Audit Committee, has an appropriate and transparent relationship with the external auditors.
In the course of audit of the Group’s operation, the external auditors have highlighted to the Audit Committee and the Board,
matters that requires the Board’s attention. The external auditors provide statutory audit function to the Group.
A summary of the activities of the Audit Committee during the year, including the evaluation of the independent audit process,
are set out in the Audit Committee Report on pages 30 to 34 of this Annual Report. The Audit Committee has considered
the independence of the external auditors and obtained declaration of independence from them during the Audit Committee
meeting.
The Audit Committee discusses the nature and scope of audit and reporting obligations with the external auditors before
commencement of audit engagement. It is also the practice of the Audit Committee to respond to auditors’ enquiries and
recommendations, if any, to ensure compliance with the various approved accounting standards in the preparation of the
Group’s financial statements.
The Audit Committee is empowered by the Board to review all issues in relation to appointment and re-appointment,
resignation or dismissal of external auditors. The external auditors have confirmed, at an Audit Committee meeting that,
they are, and have been, independent throughout the conduct of audit engagement in accordance with terms of relevant
professional and regulatory requirements.
The Audit Committee has established and approved by the Board, a more formal procedures to assess the suitability and
independence of the external auditors as well as policy governing the circumstance under which contracts for provision of
non-audit services could be entered into by the external auditors.
PRINCIPLE 6: RECOGNISE AND MANAGE RISKS
Sound Framework to Manage Risks
The Board of Directors acknowledges its responsibility for maintaining a sound system of internal control covering not only
financial controls but also controls relating to operational, compliance and risk management to safeguard shareholders’
investments and the Group’s assets. There is an on-going review process by the Board to ensure the adequacy and integrity
of the system and according with the Statement on Risk Management and Internal Control Guidelines for Directors of Listed
Issuers (the “Internal Control Guidance”). However, the Board recognises that reviewing of the Group’s system of internal
controls is a concerted and continuing process, designed to manage rather than eliminate the risk of failure to achieve
business objectives. In pursuing this objective, internal control can only provide reasonable and not absolute assurance
against material misstatement or loss.
