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Corporate Governance Report

Internal Controls

The Board is entrusted with the overall responsibility for maintaining sound and effective internal control systems of the Group. The systems are designed to provide reasonable but not absolute assurance against material misstatement or loss, and to mitigate rather than eliminate risk of failure to meet the business objectives. The following has been established to ensure there are sound and effective internal control systems within the Group:

  • (a)

    Well defined organizational structure and limit of authority;

  • (b)

    Reliable management reporting system;

  • (c)

    Clear and written company policies and procedures; and

  • (d)

    Risk Management Self-Assessment and Internal Control Self-Assessment conducted by major business entities of the


Through the Audit Committee and the Groups Internal Audit Department, the Board has conducted an annual review on the effectiveness of the internal control systems for the year ended 31 December 2010.

The Internal Audit Department adopts a risk-based approach to review all major operations of the Group on a cyclical basis. The audit reviews cover all material financial, operational and compliance controls and risk management functions. The annual audit plan and the long-term strategy plan of the Internal Audit Department are approved by the Audit Committee. The Head of Internal Audit Department reports directly to the Managing Director and the Audit Committee. Results of the 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 Audit Department to ensure that findings previously identified have been properly resolved.

Based on the Audit Committees assessment on results of the internal audit reviews for the year ended 31 December 2010, no significant irregularity or deficiency in internal controls has come to the Audit Committees attention. The Audit Committee therefore concludes that the internal control systems of the Group are adequate and effective.

The Board, based on the review of the Audit Committee, is satisfied that the Group has maintained sound and effective internal control systems for the year ended 31 December 2010.

DirectorsResponsibilities For The Financial Statements

The Board, supported by the Accounts and Finance Department, is responsible for the preparation of the accounts of the Company and its subsidiaries for the year ended 31 December 2010.

The statement by the Auditor of the Company about their reporting responsibilities is set out in the Independent Auditors Report on page 65 of this Annual Report.

Great Eagle Holdings Limited

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