ESG Report 2025

17 Through the above systematic risk management practices, the Group effectively responded to complex and changing internal and external risks and safeguarded the stable operation of its business activities. The Risk and Internal Control Department prepares a “Risk Analysis and Assessment Report” each year to summarise the tracking and management of major risks during the Year and to forecast potential risks for the coming year, thereby providing professional support for the Group's strategic decision- making. Internal Control 5.2 The United Laboratories has established the Audit Centre, which operates independently under the direct leadership of the Board. The Group’s Audit Centre provides assurance and consulting services in respect of the Group's internal control, risk management and governance processes across all aspects and throughout the full process. In accordance with the International Standards for the “Professional Practice of Internal Auditing” and the Company's “Internal Audit Charter”, the Audit Centre reports the progress of its audit work in writing to the Board on a quarterly basis to ensure that major issues are escalated and rectified in a timely manner. During the Year, the Group’s Audit Centre closely aligned its work with the Group's strategic objectives and advanced a range of special audit projects in an orderly manner. These projects broadly covered core business areas, effectively identified risks, highlighted issues and promoted closed-loop rectification. The Audit Centre continued to strengthen oversight over key areas such as marketing management and engineering procurement. Through audit reports, risk assessments and special memoranda, it promoted the implementation of management responsibilities and standardised business conduct across business units. At the same time, the Audit Centre participated deeply in the optimisation of management systems and processes, worked closely with business departments to review and improve the internal control framework, and throughout the year provided strong support for enhancing the Group's overall operational efficiency and compliance standards through continuous follow-up, thematic discussions and management recommendations. Group’s Group’s Group’s Participation in management meetings Collection of industry information Field research Monitoring of emerging risks Expert interviews Data analysis Cross-departmental collaborative assessment Implementation of response measures by each business segment Follow-up inspection by the Risk and Internal Control Department Annual risk assessment report Special risk report Quarterly risk tracking report Based on the Group's strategy and operating objectives, identify various risks that may affect the achievement of objectives, including strategic, market, operational, financial, compliance and climate-related risks. Assess the likelihood and impact of risks through qualitative and quantitative methods, rank risks and determine major risks. Select strategies such as avoidance, mitigation, transfer or acceptance according to the level of risk, and formulate specific control measures. Submit risk assessment reports regularly to the Risk Management Committee and the Board, and communicate in writing in a timely manner on matters involving material deviation from targets. Core Content Main Methods Risk Identification Risk Assessment Risk Response Risk Reporting Process Stage The United Laboratories International Holdings Limited 2025 Environmental, Social and Governance Report