The Board is responsible for establishing and maintaining CNE's internal financial control system and places importance on maintaining strong controls. The key procedures implemented by the Directors provide effective internal financial controls as follows:
· the Company's organisational structure has clear lines of responsibility;
· CNE prepares a comprehensive annual budget that is approved by the Board;
· quarterly results are reported against the annual budget and variances are closely monitored by the Directors;
· the Board is responsible for identifying the major business risks faced by CNE and for determining appropriate courses of action to manage such risks; and
· members of the Board of CNE are also members of its subsidiaries’ boards, so are actively involved in the subsidiaries board meetings.
The Board recognises, however, that such a system of internal financial control can only provide a reasonable(but not an absolute) assurance against material misstatement or loss. The Board continues to review the effectiveness of the internal financial control systems operated by CNE.