(b)
Preselect risk response. For each major risk or risk category, the
Board decides whether to avoid, reduce, share or accept the risk.
The internal auditors and internal controls are there to ensure that the
system does not deliberately or inadvertently circumvent or override
this decision;
(c)
Reduce operational surprises and losses;
(d)
Identify cross border and cross business risk and such risks which are
not normally within the scope or control of day-to-day management;
and
(e)
Improve the use of capital and resources.
However, the Board recognises that no internal control system could provide
absolute assurance against the occurrence of material errors, poor judgement
in decision-making, human errors, losses, fraud or other irregularities.
The internal control system is designed to manage rather than eliminate the
risk of failure to achieve the business objectives.
The internal and external auditors conducted annual review on the
effectiveness of the Group’s key internal controls, including financial,
operational, policy, compliance and information technology controls and risk
management. Any material non-compliance or internal control weaknesses
and recommendations for improvements are reported to the AC. A copy of
the internal audit report is also issued to the relevant departments for their
follow-up actions and the improvement measures are closely monitored and
reviewed by the AC. In addition, any major control weaknesses on financial
reporting identified in the course of the statutory audit, are highlighted by the
external auditors to the AC.
For the purpose of the Board expressing its opinion and in line with the
Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) Internal Controls IntegratedFramework, “internal controls” isbroadly
defined as “a process effected by an entity’s board of directors and other
personnel, designed to provide reasonable assurance regarding the
achievement of objectives in the following categories:
(a) effectiveness and efficiency of operations;
(b) reliability of financial reporting; and
(c) compliance with applicable laws and regulations.
The first category addresses an entity’s basic business objectives, including
performance and profitability goals and safeguarding of assets. The second
category relates to the preparation of reliable published financial statements,
including quarterly and full year financial reports and financial information
derived from such statements, reported publicly. The third category deals with
complying with those laws and regulations to which the entity is subjected to.
Governance
Disclosure Guide
CORPORATE GOVERNANCE REPORT
44
ASL Marine Holdings Ltd.
Annual Report 2016
