Financial Statements - Tung Lok Restaurants 2000 Ltd

Statement of
Corporate Governance
For FY2008, the AC met once with the external auditors without the presence of the management. The AC
reviewed the findings of the auditors and the assistance given to them by management.
The AC has undertaken a review of all non-audit services provided by the external auditors for FY2008
and is satisfied that such services would not in the AC’s opinion affect the independence of the external
auditors.
The external auditors carry out in the course of their statutory audit, a review of the effectiveness of the
Company’s material internal controls, including financial, operational and compliance controls. Material
non-compliance and internal control weaknesses noted during their audit are reported to the AC together
with their recommendations. The internal auditors follow up on the external auditors’ recommendations in
a joint effort to strengthen the Group’s internal control systems.
The AC has reviewed and, based on the audit reports and management controls in place, is satisfied that
there are adequate internal controls in the Group.
The Company has in place a whistle-blowing framework where staff of the Company can access the
Audit Committee Chairman and members or the Head of Human Resource to raise concerns about
improprieties.
Internal Controls and Risk Management
Principle 12: The Board should ensure that the Management maintains a sound system of
internal controls to safeguard the shareholders’ investments and the company’s assets.
The AC will ensure that a review of the effectiveness of the Company’s material internal controls, including
financial, operational and compliance controls and risk management, is conducted annually. In this
respect, the AC will review the audit plans, and the findings of the auditors and will ensure that the
Company follows up on the auditors’ recommendations raised, if any, during the audit process.
The Group has in place a system of internal control and risk management for ensuring proper accounting
records and reliable financial information as well as management of business risks with a view to
safeguarding shareholders’ investments and the Company’s assets. The risk management framework
implemented provides for systematic and structured review and reporting of the assessment of the degree
of risk, evaluation and effectiveness of controls in place and the requirements for further controls.
Internal Audit
Principle 13: The company should establish an internal audit function that is independent
of the activities it audits.
An internal audit function has been set up. The internal auditor reports to the Chairman of the AC and
also to the Chief Financial Officer for administrative purpose. The internal audit plan is approved by the
AC. The results of the audit findings are submitted to the AC for its review in its meeting. The scope of the
internal audit covers the audits of all operations.
The AC is satisfied that the internal audit function is adequately resourced and has appropriate standing
within the Company in view of the current scale of operations.
COMMUNICATION WITH SHAREHOLDERS
Communication with Shareholders
Principle 14: Companies should engage in regular, effective and fair communication
with shareholders.
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