HUTCHISON PORT HOLDINGS TRUST 116 CORPORATE GOVERNANCE REPORT The AC is responsible for the oversight and monitoring of the matters raised through the whistleblowing channel. Under its terms of reference, the AC may report to the Board the signifi cant matters raised through the whistleblowing channel. The Whistleblowing Policy sets out procedures which seek to ensure the identity of the whistleblower is kept confi dential. To this end, the Trustee-Manager has deployed mechanism (such as specifi c email address and post box) to restrict access to the identity of the whistleblower to the Deputy Company Secretary and the Head of Internal Audit only. To prohibit obstructive or retaliatory actions, the Trustee-Manager may take any disciplinary, administrative and/or other action against any person or entity who engages in obstructive or retaliatory action against the whistleblower. The Whistleblowing Policy is available on HPH Trust’s corporate website (https://www.hphtrust.com/corporate_governance.html). Internal Audit The Group’s internal audit function is performed by the internal audit staff of the controlling unitholder, CK Hutchison Holdings Limited and does not administratively report to the CEO. As such, the appointment, termination and remuneration of the Head of Internal Audit is not determined by the Group. Head of Internal Audit, reporting directly to the chairperson of the AC, provides independent assurance as to the existence and effectiveness of the risk management activities and controls in the Group’s business operations. It has wide authority to access documents, records, properties and personnel of the Group. By applying risk assessment methodology and considering the dynamics of the Group’s activities, internal audit function devises its three-year risk-based audit plan for review by the AC. The audit plan is subject to continuous reassessment taking into account external and internal factors such as macro economic and regulatory changes, business and operational changes, emerging risks and opportunities (including sustainability and cyber-related ones), as well as audit and fraud fi ndings which may affect the risk profi le of the Group during the year. Internal audit is responsible for assessing the Group’s risk management and internal control systems, including reviewing the interested person transactions of HPH Trust, formulating an impartial opinion on the systems, and reporting its fi ndings to the AC, the CEO, the CFO and the senior management concerned as well as following up on the issues to ensure that they are satisfactorily resolved within the agreed timeline. In addition, internal audit maintains a regular dialogue with the Group’s external auditor so that the parties are aware of the signifi cant factors which may affect their respective scope of work. Depending on the nature of business and risk exposure of individual business units, the scope of work performed by the internal audit function includes fi nancial, IT, operations, sustainability, business ethics, governance policy and regulatory compliance reviews, recurring and surprise audits, as well as productivity efficiency reviews. The Internal Audit team including the Head of Internal Audit attained a combination of one or more professional qualifi cations in accountancy, internal audit, information systems audit, fraud examination, and also has specialised knowledge in relevant areas like engineering. In addition, all the managerial grade staff have an average of over 20 years of experience in audit. The internal auditor carried out their audit work based on the Code of Ethics and International Standards for the Professional Practices for Internal Auditing issued by The Institute of Internal Auditors, which provide guidance for the professional conduct of internal auditing. Depending on the nature of business and risk exposure of individual business units, the scope of work performed by the internal audit function includes fi nancial and operations reviews, business ethics, the reviews of compliance and information technology controls as well as risk management system, recurring and surprise audits, fraud investigations and productivity efficiency reviews. The Internal Audit team also incorporates the sustainability reporting processes into its internal audit plan, taking into consideration the expectations of the Board, Management and other stakeholders as part of HPH Trust’s prioritisation of material ESG factors. During the course of their work, the internal audit function is given full access to any documents, records or personnel including access to the AC. The internal audit function is also responsible for periodic fraud analyses and independent investigations. In accordance with the Group’s Code of Conduct and Anti-Fraud and Anti-Bribery Policy, each business unit follows the stated escalation procedures to report to the CFO and Head of Internal Audit any actual or suspected fraudulent activities within one working day should the amount involved exceed the de minimis threshold as agreed between the CFO and the CEO or the head of fi nance of each business unit. In addition, each business unit submits a summary of fraud incidents statistics to the CFO who reports the statistics to the Head of Internal Audit on a quarterly basis. These cases, together with those escalated through the whistleblowing channels, are recorded in the Trustee-Manager’s centralised fraud incidents register under the custody of the Head of Internal Audit, and are independently assessed and investigated as appropriate. The Head of Internal Audit would promptly escalate any incidents of a material nature to the chairperson of the AC for his/her direction. Also, a summary of the fraud incidents and relevant statistics (including results of independent investigations and actions taken) is presented to the AC on a quarterly basis.
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