Annual Report 2021

Corporate Governance Report 44 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED The key procedures that the Board established to provide effective internal controls are as follows: ‧ A distinct organisation structure exists with defined lines of authority and control responsibilities; ‧ A unified and comprehensive auditing and management accounting system for the Group is in place to prepare financial and operational performance indicators to the management and the relevant financial information for reporting and disclosure purpose; for maintaining proper accounting records; and for ensuring the reliability of financial information used within the business or for publication; ‧ A centralised management system in respect of external investment, equity transfer and assets disposal is in place. Investment Assessment Committee together with Operations Department and Business Development Department are responsible for the Group’s investment exposure analysis at home and abroad, and for monitoring the level of investment exposures faced by the Group. A set of processing procedures for examination and approval is implemented by our headquarter on the acquisitions and disposals of assets by the operating units under the Group; ‧ Systems and procedures are also in place to identify, measure, manage and control risks including reputation, legal, strategic, financing, guarantee, taxation, market, operational and project construction risks. Exposure to risks of implementation and development of strategies, changes in policies and legal proceedings is monitored by the Group’s officer in charge of strategic research together with Strategy and Innovation Department/Technology and Innovation Development Institute, Operations Department and Risk Management and Internal Audit Department Legal and Compliance Department. Exposure to risks of the Group’s financing, guarantee, taxation and use of funds is monitored by the Group’s officer in charge of financial management together with the Finance Department/Capital Management Department and other risks management units. Exposure to risks of market, operation and change of operation environment relating to the Group’s business is monitored by the Group’s officer in charge of business and operation management together with Operations Department, Marketing and Commercial Department, Safety Supervision Management Department and the operating units. Exposure to risks of the Group’s project construction, equipment and bulk materials procurement is monitored by the Group’s officer in charge of project management together with Safety Supervision Management Department, Operations Department and Risk Management and Internal Audit Department Legal and Compliance Department. In addition, procedures are designed to ensure compliance with applicable laws, rules and regulations; ‧ Basic risk management and control system is set up while internal control system and self-assessment system are established according to the Group’s actual circumstances; ‧ Policies and procedures are designed for safeguarding assets against unauthorised use or disposition. The procedures provide reasonable but not absolute assurance against material errors, losses or fraud;