Audit and Risk Management Committee
(Extracted from the Corporate Governance Report contained in the Company's 2015/16 Annual Report dated 8 September 2016)
The Audit Committee was established in 1999. In view of the recent amendments to the Code relating to risk management and internal control, the Board has approved the amendments to the terms of reference of the Audit Committee to include risk management function, and the Audit Committee was renamed as the Audit and Risk Management Committee with effect from 10 June 2016 to reflect its role in risk management. The Committee is chaired by Dr. Li Ka-cheung, Eric, an Independent Non-Executive Director. Other members of the Committee are Mr. Yip Dicky Peter, Mr. Leung Kui-king, Donald and Dr. Leung Nai-pang, Norman, who was appointed as a member with effect from 13 November 2015 in place of Mr. Wong Yick-kam, Michael. After the aforesaid appointment, all members are Independent Non-Executive Directors.
No former partner of the Company’s existing auditing firm acted as a member of the Audit and Risk Management Committee within one year from ceasing to be a partner or to have any financial interest in the auditing firm.
The duties of the Audit and Risk Management Committee include:
- reviewing the Group’s financial statements and annual reports and accounts, and interim reports before submitting them to the Board;
- reviewing the Group’s financial controls, and its risk management and internal control systems;
- ensuring that management has fulfilled its duty to establish and maintain an effective risk management and internal control systems including the adequacy of resources, staff qualifications and experience, training programmes and budget of the Company’s accounting and financial reporting function;
- considering major investigation findings on risk management and internal control matters;
- reviewing the internal audit programme and ensuring the internal audit function is adequately resourced and effective;
- reviewing the Group’s financial and accounting policies and practices;
- reviewing the external auditor’s management letter and questions raised by the external auditor to management, and management’s response to such questions;
- reporting to the Board on matters in the code provision under C.3 of the Code;
- meeting with the external auditor to discuss issues regarding audit at least once a year in the absence of management; and
- reviewing the arrangements that employees of the Company can use, in confidence, to raise concerns about possible improprieties in financial reporting, internal controls or other matters.
The Audit and Risk Management Committee is provided with sufficient resources enabling it to perform its duties. The updated terms of reference of the Committee are posted on the websites of the Company and HKEx.
The Audit and Risk Management Committee held three meetings during the year ended 30 June 2016. It had reviewed the interim and annual results of the Group and discussed and approved the relevant financial reports; reviewed the Group’s internal control system, risk assessment result and internal audit activities; and discussed the audit plan for the financial year 2016/17. Two private sessions between the members of the Committee and the external auditor without the presence of the management had been arranged in the aforesaid meetings. The attendance records of the members at the Committee meetings are set out below:
|Committee members||Meetings attended / held|
|Li Ka-cheung, Eric||3/3|
|Yip Dicky Peter||3/3|
|Leung Kui-king, Donald||3/3|
|Leung Nai-pang, Norman
(appointed as a member with effect from 13 November 2015)
|Wong Yick-kam, Michael
(ceased to act as a member with effect from 13 November 2015)
There was no disagreement between the Board and the Audit and Risk Management Committee on the selection, appointment, resignation or dismissal of the external auditor.
The Audit and Risk Management Committee monitors the audit and non-audit services rendered to the Group by the external auditor and ensures that the engagement of the external auditor in other non-audit services will not impair its audit independence or objectivity. An independence confirmation has been obtained from the external auditor which confirmed that during the course of its audit on the Company’s consolidated financial statements for the year ended 30 June 2016 and thereafter to the date of the annual report, it is independent of the Group in accordance with the independence requirements of the Hong Kong Institute of Certified Public Accountants.
The fees in respect of audit and non-audit services provided to the Company and its subsidiaries by the external auditor for the year ended 30 June 2016 amounted to approximately HK$17 million and HK$6 million respectively. The non-audit services mainly consist of consultancy, taxation, review and other reporting services.