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(11817-V) |

Annual Report


5.2 Risk Management and Internal Controls

The Board is responsible for overseeing the establishment, implementation and ongoing effectiveness

of the Company’s risk management and internal control system. The Audit Committee provides advice

and assistance to the Board in meeting that responsibility and the role of the former in relation thereto

is described in the Statement on Risk Management and Internal Control of this Annual Report.

The system of internal controls is designed to manage and provide reasonable and not absolute

assurance against the risk of material errors, frauds or losses occurring. The Board however, recognizes

that the system must continually evolve to support the type of business and size of operations of

the Group. As such, the Board will, when necessary, put in place appropriate action plans to further

enhance the Group’s system of internal control.

5.3 Related Party Transactions

All related party transactions are reviewed by the Audit Committee on a quarterly basis. The shareholders

mandate in respect of existing and new recurrent related party transactions is obtained at the AGM of

the Company on an annual basis.

Details of the proposed renewal of shareholders’ mandate for recurrent related party transaction is set

out in the Circular to Shareholders dated 29 July 2016.

5.4 Relationship with Auditors

Through the Audit Committee, the Board has established transparent and appropriate relationship with

the auditors, both internal and external. The role of the Audit Committee in relation to the auditors,

including a summary of activities of the Audit Committee is included in the Audit Committee Report

stated herein.

Internal Auditors

The Group’s internal audit function is independent of the activities they audit and is performed with

impartiality, proficiency and due professional care.

The function of the Group’s internal auditors is complementary to, but different from that of

external auditors. It undertakes regular monitoring of the Group’s key controls and procedures –

an integral part of the Group’s system of internal control. An internal audit review highlights major

weaknesses in control procedures and makes recommendations for improvements. Internal Audit

also undertakes investigations on the Audit Committee’s behalf, and follows up on complaints on

matters affecting the Group’s operations.

External Auditors

The Group’s independent external auditors fill an essential role for the shareholders by enhancing

the reliability of the Group’s financial statements and giving assurance of that reliability to users

of these financial statements. The external auditors have an obligation to bring any significant

defects in the Group’s system of control and compliance to the attention of Management, the Audit

Committee and the Board. This includes the communication of fraud.