105 SWIRE PROPERTIES ANNUAL REPORT 2024 Management structure: The Group has a clear organisational structure that, to the extent required, delegates the day-to-day responsibility for the design, documentation and implementation of procedures and monitoring of risk. Individuals appreciate where they will be held accountable in this process. A control self-assessment process requires management to assess, through the use of detailed questionnaires, the adequacy and effectiveness of risk management and internal controls over the reliability of financial reporting, the effectiveness and efficiency of operations and compliance with applicable laws and regulations. This process and its results are reviewed by internal auditors and form part of the Audit Committee’s annual assessment of control effectiveness. Controls and review: The control environment comprises policies and procedures intended to ensure that relevant management directives are carried out and actions that may be needed to address risks are taken. These may include approvals and verifications, reviews, safeguarding of assets and segregation of duties. Control activities can be divided into operations, financial reporting and compliance, although there may, on occasion, be some overlap between them. The typical control activities include: • analytical reviews: for example, conducting reviews of actual performance versus budgets, forecasts, prior periods and competitors • direct functional or activity management: reviews of performance reports, conducted by managers in charge of functions or activities • information-processing: performing controls intended to check the authorisation of transactions and the accuracy and completeness of their reporting, for example, exception reports • physical controls: ensuring equipment, inventories, securities and other assets are safeguarded and subjected to periodic checks • performance indicators: carrying out analyses of different sets of data, operational and financial, examining the relationships between them, and taking corrective action where necessary • segregation of duties: dividing and segregating duties among different people, with a view to strengthening checks and minimising the risk of errors and abuse The Company has in place effective processes and systems for the identification, capture and reporting of operational, financial and compliance-related information in a form and time-frame intended to ensure that staff carry out their designated responsibilities. Internal audit: Independent of management, the Group Internal Audit Department (“GIAD”) reports directly to the Audit Committee and performs regular reviews of key risk areas and monitors compliance with Group accounting, financial and operational procedures. The role of GIAD is discussed further on page 107. Audit Committee The Audit Committee, consisting of three Non-Executive Directors, May Wu, Spencer Fung and Martin Murray, assists the Board in discharging its responsibilities for corporate governance and financial reporting. Two of the Committee members are Independent Non-Executive Directors, one of whom, May Wu, is Chairman. Spencer Fung succeeded Lily Cheng as a member of the Audit Committee with effect from the conclusion of the 2024 Annual General Meeting held on 7th May 2024. All the other members served for the whole of 2024. The terms of reference of the Audit Committee follow the guidelines set out by the Hong Kong Institute of Certified Public Accountants and comply with the CG Code. They are available on the Company’s website. The Audit Committee met four times in 2024. Regular attendees at the meetings are the Finance Director, the General Manager, Group Finance, the Group Head of Internal Audit, the Digital and IT Director and the external auditors. The Audit Committee meets at least twice a year with the external auditors, and at least once a year with the Group Head of Internal Audit, in each case without the presence of management. Each meeting receives written reports from the external auditors and GIAD. The external valuer (Cushman & Wakefield Limited) also attended two of the meetings.