SWIRE PROPERTIES ANNUAL REPORT 2023 Management structure: The Group has a clear The Company has in place effective processes and systems organisational structure that, to the extent required, for the identification, capture and reporting of operational, delegates the day-to-day responsibility for the design, financial and compliance-related information in a form and documentation and implementation of procedures and time-frame intended to ensure that staff carry out their monitoring of risk. Individuals appreciate where they will be designated responsibilities. held accountable in this process. Internal audit: Independent of management, the Group A control self-assessment process requires management to Internal Audit Department (“GIAD”) reports directly to the assess, through the use of detailed questionnaires, the Audit Committee and performs regular reviews of key risk adequacy and effectiveness of risk management and areas and monitors compliance with Group accounting, internal controls over the reliability of financial reporting, financial and operational procedures. The role of GIAD is the effectiveness and efficiency of operations and discussed further on pages 106 to 107. compliance with applicable laws and regulations. This process and its results are reviewed by internal auditors Audit Committee and form part of the Audit Committee’s annual assessment The Audit Committee, consisting of three Non-Executive of control effectiveness. Directors, May Wu, Lily Cheng and Martin Murray, assists Controls and review: The control environment comprises the Board in discharging its responsibilities for corporate policies and procedures intended to ensure that relevant governance and financial reporting. Two of the Committee management directives are carried out and actions that members are Independent Non-Executive Directors, one of may be needed to address risks are taken. These may whom, May Wu, is Chairman. All the members served for include approvals and verifications, reviews, safeguarding the whole of 2023. of assets and segregation of duties. Control activities can The terms of reference of the Audit Committee follow the be divided into operations, financial reporting and guidelines set out by the Hong Kong Institute of Certified compliance, although there may, on occasion, be some Public Accountants and comply with the CG Code. They are overlap between them. The typical control activities available on the Company’s website. include: • analytical reviews: for example, conducting reviews of The Audit Committee met four times in 2023. Regular actual performance versus budgets, forecasts, prior attendees at the meetings are the Finance Director, periods and competitors the Financial Controller, the Group Head of Internal Audit, • direct functional or activity management: reviews of the Digital and IT Director and the external auditors. performance reports, conducted by managers in charge The Audit Committee meets at least twice a year with the of functions or activities external auditors, and at least once a year with the Group • information-processing: performing controls intended Head of Internal Audit, in each case without the presence to check the authorisation of transactions and the of management. Each meeting receives written reports accuracy and completeness of their reporting, from the external auditors and GIAD. The external valuer for example, exception reports (Cushman & Wakefield Limited) also attended two of the • physical controls: ensuring equipment, inventories, meetings. securities and other assets are safeguarded and The work of the Committee during 2023 included reviews subjected to periodic checks of the following matters: • performance indicators: carrying out analyses of • the completeness, accuracy and integrity of formal different sets of data, operational and financial, announcements relating to the Group’s performance examining the relationships between them, and taking including the 2022 annual and 2023 interim reports and corrective action where necessary announcements, with recommendations to the Board • segregation of duties: dividing and segregating duties for approval among different people, with a view to strengthening • the Group’s compliance with regulatory and statutory checks and minimising the risk of errors and abuse requirements 105