2013 — Page 36

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Hong Kong Ferry (Holdings) Company Limited Annual Report 2013

Corporate Governance Report (Continued)

INDEPENDENT AUDITOR'S

REMUNERATION

Apart from carrying out the annual audit, KPMG, Certified

Public Accountants, Hong Kong, the Independent Auditor

of the Company also carried out the review on the interim

reports of the Company. The fee of the annual audit is

HK$1,608,000 whereas the fee for the interim review is

HK$283,000. Save for the interim review, KPMG did not

provide any substantial non-audit services to the Company.

COMPANY SECRETARY

Mr. Yuen Wai Kuen, Peter, the Company Secretary of the Company, is a full time employee of the Group and has day-to-day knowledge of the Company's affairs. During the financial year, the Company Secretary has duly complied with the relevant professional training requirement under Rule 3.29 of the Listing Rules. The biographical details of the Company Secretary is set out in the section headed

"Directors' and Senior Management's Profile" in this annual report on page 8.

INTERNAL CONTROLS AND RISK

MANAGEMENT

The Company maintains a comprehensive and effective

internal control system on income and capital and revenue

expenditures. As part of internal audit, the Company has its own internal audit department and maintained a system of internal control, with manuals guiding internal controls on

business operation and conducted audits of all branches of

operations on a regular basis. The Internal Audit Department would recommend improvement and strengthening in the implementation of all internal control systems. The Company

and the directors will review the effectiveness of the internal

control system from time to time to meet with the changing business operation environment.

For the year ended 31 December 2013, the internal audit department has conducted a review of the effectiveness

of the system of internal control on the areas of financial, operational and compliance controls and risk management

functions.

The members of the Risk Management Committee met

twice in February and July 2013 respectively. The senior management and the Internal Audit Manager had identified the relevant risks of the operational units and the control strategies of the Company and incorporated significant risk management and control strategies in the internal audit

reports for the review of the Audit Committee members.

The Internal Audit Manager, who is independent to the Company's daily operations, reports directly to the Audit. Committee and Group General Manager and regularly conducts audits of the practices, procedures, expenditures and internal control for business operations and corporate functions of the Company.