HUTCHISON PORT HOLDINGS TRUST 112 CORPORATE GOVERNANCE REPORT Internal Control Environment and Systems Group structures covering all subsidiaries, associated companies and joint ventures are maintained and updated on a timely and regular basis. Managing Directors or General Managers are appointed to the boards of all material operating subsidiaries and associated companies of HPH Trust for overseeing and monitoring those companies, including attendance at board meetings, review and approval of budgets and plans, and determination of business strategies with associated risks identifi ed and key business performance targets set. The executive management team of each core business division is accountable for the conduct and performance of each business in the division within the agreed strategies, and similarly, management of each business is accountable for its conduct and performance. The CEO monitors the performance and reviews the risk profi les of the Group companies on an on-going basis. The internal control procedures of the Group include a comprehensive system for reporting information to the executive management teams of each core business and the Executive Director. Business plans and budgets are prepared annually by management of individual businesses and subject to review and approval by both the executive management teams and the Executive Director as part of the Group’s fi ve-year corporate planning cycle. Reforecasts for the current year are prepared on a quarterly basis, reviewed for variances to the budget and for approval. When setting budgets and reforecasts, management identifi es, evaluates and reports on the likelihood and potential fi nancial impact of signifi cant business risks. The Executive Director reviews monthly management reports on the fi nancial results and key operating statistics of each business and holds monthly meetings with the executive management team and senior management of business operations to review these reports, business performance against budgets, forecasts, signifi cant business risk sensitivities and strategies. In addition, fi nance directors and fi nancial controllers of each of the major businesses attend monthly meetings with the CFO to review monthly performance against budget and forecast, and to address accounting and fi nance related matters. The Group maintains a centralised cash management system for its subsidiary operations. The Group’s Finance Department oversees the Group’s investment and lending activities and also evaluates and monitors fi nancial and operational risks, and makes recommendations to the Management to mitigate those risks. Treasury reports on the Group’s cash and liquid investments, borrowings and movements thereof are distributed to the Management weekly. The Group has established guidelines and procedures for the approval and control of expenditures. Operating expenditures are subject to overall budget control and are controlled within each business with approval levels set by reference to the level of responsibility of each executive and officer. Capital expenditures are subject to overall control within the annual budget review and approval process, and more specifi cally, material expenditures within the approved budget as well as unbudgeted expenditures are subject to approval by the Executive Director, the CEO or the CFO prior to commitment. Quarterly reports of actual versus budgeted and approved expenditures are also reviewed. The Group has also established treasury policies covering specifi c aspects, such as bank account control and procedures, monitoring and compliance control for loan covenants, approval and reporting process for derivatives and hedging transactions. In terms of formal review of the Group’s risk management and internal control systems, a risk management and internal control self-assessment process that, on a half-yearly basis, requires the executive management team and senior management of each core business to review, evaluate and declare the effectiveness of such systems covering all material controls, including fi nancial, operational and compliance controls over the operations of the business and devise action plans to address the issues, if any, is in place. These assessment results, together with the risk management report described later in this report and the independent assessments by the internal and external auditors, form part of the bases on which the AC formulates its opinion on the effectiveness of the Group’s risk management and internal control systems. HPH Trust is committed to high standards of business integrity. The Group has in place an internal policy on competition law compliance, set out guidelines and conducts trainings for employees to ensure compliance with competition law in all its business dealings and conduct.
RkJQdWJsaXNoZXIy NTM2MDQ5