66
CORPORATE GOVERNANCE REPORT
HOTEL ROYAL
̛Ө
ROYAL MEMORIES
(d) review annually the adequacy and effectiveness of the risk management and internal control system;
and
(e) promote risk awareness culture through the Company for effective risk management.
A summary of the Group Risk Factors and Risk Management is included in Page 73 in this Annual Report.
The Board places special emphasis in the identification of major risk factors and management when expanding
into new overseas market, and that the short term non-performance of the new investments will not place the
Company and the Group under un-manageable risk. Hence, every new overseas investment are thoroughly
and robustly discussed at Board meeting, with special emphasis on the input by the Independent Directors.
The work of the internal auditors and the report of the external auditors have enabled the identification of key
risks which are reported to the ARC to facilitate the Board’s oversight of the effectiveness of risk management
and the adequacy of mitigating measures taken by management to address the underlying risks.
TheARCassists theBoard inproviding riskmanagement oversightwhile theownershipof day-to-daymanagement
and monitoring of existing internal control systems are delegated to management which comprises the CEO,
the Group Financial Controller (“GFC”) and Head of each business division.
The Board reviews the adequacy and effectiveness of the Company’s risk management and internal control
systems including financial, operational, compliance and information technology controls based on report
prepared by the internal auditors and reviewed by the management at least once a year.
Based on the internal controls established and maintained by the Company, work performed by the internal
and external auditors, and reviews performed by management, various Board Committees and the Board,
the Board with the concurrence of the ARC is of the opinion that the Company’s internal controls, addressing
financial, operational, compliance and information technology controls and risk management systems, were
adequate and effective as at 31 December 2015.
For FY2015, the Board and the ARC have received assurance from the CEO and the GFC on the adequacy and
effectiveness of the Company’s risk management and internal control systems, and that the financial records
have been properly maintained and the financial statements give a true and fair view of the Company’s
operations and finances.
In assessing the need to establish a separate risk committee to assist the Board in carrying out its responsibility of
overseeing the Company’s risk management framework and policies, the Board after having discussed with the
members of the ARC and the Board members, resolved that the function of the risk committee is best carried
out by the ARC and in this connection in line with its enhanced role the Audit Committee has been renamed
ARC in FY2013.
3.3 Audit and Risk Committee
Principle 12: The Board should establish an Audit Committee with written terms of reference which clearly set
out its authority and duties.
The ARC was tasked by the Board to assist the Board in carrying out its responsibility of overseeing the Company’s
risk management framework and policies. To reflect its enhanced role, the Audit Committee was renamed the
ARC in FY2013.
