Annual Report 2019

Environmental, Social and Governance Report 52 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED INTERNAL CONTROL AND RISK MANAGEMENT The Group has formulated the Measures for the Internal Control Evaluation ( 《內部控制評價工作辦法》 ) and Measures for the Comprehensive Risk Management ( 《全面 風險管理工作辦法》 ) and carried out internal management and control as well as risk management according to these measures. In 2019, the scope of the Group’s internal control system has basically covered the business managed and controlled by its subsidiaries with the internal control systems of three major business segments of containers, bulk cargos and logistics parks were basically formed, and hence forming a long-term working mechanism. The Group has established an annual assessment mechanism for material risks, expanded its risk identification channels, strengthened its efforts in risk identification and carried out specific risk management and control. The Group also conducted research on the formulation of risk management tools and standards and carried out customer credit risk management as well as the management and control of foreign exchange rate risks, thereby enhancing its risk mitigation capability. In 2019, the Group has implemented a total of 16 internal audit projects with 22 business units included in the risk control system. Through regular self-assessment and continuous enhancement of risk management and control capabilities, the Group has no material risk incidents and material loss on assets. ANTI-CORRUPTION The Group has strictly observed relevant laws and regulations on anti-corruption in the place of operation, such as the Anti- Monopoly Law of the People’s Republic of China ( 《中華人 民共和國反壟斷法》 ), the Anti-Unfair Competition Law of the People’s Republic of China ( 《中華人民共和國反不正當 競爭法》 ) in Mainland China and the Prevention of Bribery Ordinance from the Laws of Hong Kong. Guided by the anti- corruption requirements of China Merchants Group, the Group developed policies and procedures against corruption through system establishment, risk investigation and anti- corruption meetings. The Group organised anti-corruption education for employees, such as training on discipline, warning education and conference to strengthen their awareness of self-discipline. Carrying out warning education activities on anti-corruption Establishment of Anti-corruption System The Group formulated 4 new systems including the Implementation Measures of Penalty Enforcement ( 《處 分執行實施辦法》 ) and amended and refined 7 relevant systems, with a view to further standardizing the exercise of power from the source of systems and reinforcing the supervision of discipline enforcement and accountability in a practical manner, hence facilitating sound development of the Company. Investigation of Integrity Risks The Group has newly formulated the Administration Measures on the Investigation, Prevention and Control of Integrity Risk Points (Trial) ( 《廉潔風險點排查防控管理辦法 ( 試行 ) 》 ) and established an integrity risk investigation mechanism to arrange centralized investigation on integrity risk points and implement prevention and control measures on a daily basis. All subordinate units consolidated a total of 302 key business procedures and processes with 267 integrity risk points in total. Organizing staff visits to the warning education base