Annual Report 2019

Corporate Governance Report 062 Annual Report 2019 Miramar Hotel and Investment Company, Limited Mitigation Measures and Evaluation Findings During the year, the risk management process assessed 11 different categories of risk in respect of their occurrence likelihood and impact on our financial performance, reputation, health and safety, legal and rules compliance, staffing and environmental effects. They are summarized as follows: Risk Categories Key Risks Key Measures in Risk Mitigations Risk Level (Risk Velocity) Risk Momentum Investment Strategy Return on acquisitions/ investments/business developments could turn out to fall short of expectations due to uncontrollable external factors and may result in financial loss – Investment decisions are supported by detailed integration plan and business strategies with management approval – Potential projects/ investments are subject to extensive due diligence review by in-house specialists and external advisors – Continuing monitoring and review of all aspects of development, planning and progress by experienced managers – Controls over projects/ investment are independently reviewed by internal audit Medium (Slow)  Under the current investment plan and control procedures, the risk is considerably stable Economic and Political Outlook A significant portion of the Group’s businesses and operations are in Hong Kong; adverse changes in economic and political environments could have a direct or indirect impact to the Group’s earnings – Establishment of risk indicators to constantly evaluate the economic environment it operates in and enable prompt response to any changes – Continuing monitoring of changes in the political agenda in Hong Kong and mainland China – Periodically review the marketing strategy to cater to changes in economic and political outlook – Closely monitor on business performance and communicate with frontline staff Medium to High (Slow)  The Hong Kong economy has entered into a technical recession. Uncertainties arising from the China-US Trade War and Hong Kong’s unstable political atmosphere still exist. The risk is expected to increase