Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 62 CORPORATE GOVERNANCE REPORT (CONTINUED) RISK MANAGEMENT AND INTERNAL CONTROL (CONTINUED) Risk Governance Structure The Company’s governance structure for its risk management system is shown below. Each party has well defined and detailed roles and responsibilities. Board of Directors Audit Committee Internal Audit Risk Management Taskforce Functional Heads Risk Assessment Methodology The Company’s methodology for its risk assessment comprises four core stages (i.e. Risk Identification, Risk Assessment, Risk Responses, and Risk Monitoring and Reporting). These processes are performed at least once a year to address changes in the Company’s business environment. Review on Effectiveness of Risk Management and Internal Control Systems The Board conducted an annual review on the effectiveness of risk management and internal control systems, covering all material controls such as financial, operational and compliance controls. In addition, the Board has appointed an international accountancy firm to review the internal control systems of the Company on an on-going basis. The review covered all material controls, including financial, operational and compliance controls, as well as risk management functions.