The Board is responsible for maintaining sound and effective internal control systems, which are designed for safeguarding the Group’s assets, maintaining proper accounts, and ensuring compliance with relevant laws and regulations. The systems of internal control are aimed at mitigating the risks faced by the Group to an acceptable level, therefore such systems are designed to provide reasonable, but not absolute, assurance against material misstatement or loss, and to manage risks of failure in the Group’s operational systems.
Measures have been established to provide effective internal control systems, including a defined organisational structure with clear lines of responsibility and authority; an appropriate management reporting system; and a periodic control risk self- assessment conducted by major business units to ensure the adequacy of relevant risk mitigation plan.
For the year ended 30 June 2016, the Board has, through the Audit Committee and with the assistance of the Management and the internal and external auditors, conducted a review of the effectiveness of the Group’s internal control systems, including without limitation financial control, operational control, compliance control and risk management functions. The Board is of the view that the internal control systems are effective and there are no irregularities, improprieties, fraud or other deficiencies that suggest material deficiency in the effectiveness of the Group’s internal control systems. In addition, through the Audit Committee, the Board also considered the adequacy of resources, qualifications and experience of staff of the Group’s accounting and financial reporting function including their training programmes and budget.
The internal auditor adopts a risk-and-control-based approach to review all major operations of the Group. An audit plan would be formulated in a risk-weighted manner so that priorities and appropriate audit frequency could be given to areas with higher risks. Results of audit reviews in the form of audit reports are submitted to the members of the Audit Committee and discussed at the Audit Committee meetings. The internal audit reports are also followed up by the internal auditor to ensure that findings previously identified have been properly resolved.