manage these risks, and the internal audit reports on the operational effectiveness of the material controls. Accordingly, the Board, through the Board Committees and supported by the Group’s R&A and Internal Audit functions, is satisfied that internal control issues are identified on a timely basis and remedial actions are taken promptly to minimise lapses. The Board has received assurance from the Group President & CEO and Group CFO on the adequacy and effectiveness of the Company’s internal controls and risk management system. Based on the internal controls and risk management process established and maintained by the Group, work performed by the internal and external auditors, and reviews performed by Management and various Board Committees, the Board is satisfied that the Group’s framework of internal controls (including financial, operational, compliance and information technology controls) as well as the risk management systems are adequate and effective as at 31 December 2022. The Audit Committee concurs with the Board on the adequacy and effectiveness of the internal controls and risk management systems established and maintained by the Group as at 31 December 2022. In this regard, the Board also notes that no framework of internal controls can provide absolute assurance against the occurrence of material errors, poor judgment in decision making, human error, fraud or other irregularities. Audit Committee (Principle 10) Audit Committee Kevin Kwok Khien (Chairman) Lim Ah Doo Song Su-Min The Audit Committee (AC) comprises all independent Directors with majority, including the AC Chairman, having relevant accounting or related financial management experience. The AC does not comprise any former partner or Director of ST Engineering’s existing audit firm within two years preceding their appointment to the AC and none of them have any financial interest in the audit firm. Under its terms of reference, the AC performs the following duties and responsibilities: • reviews the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements and all announcements relating to financial performance; • reviews the adequacy and effectiveness of internal controls and risk management systems; • reviews the assurance from the Group President & CEO and the Group CFO on the financial records and financial statements; • makes recommendation to the Board on the appointment, removal, remuneration and the terms of engagement of the external auditors; The RSC continues to monitor the implementation of risk management policies and procedures and receives updates on the risk registers maintained by the respective businesses. Other key activities during the year include regulatory compliance reviews, as well as assessment of business disruption risks and their corresponding business continuity plans. c) Control Self-Assessment Process The Control Self-Assessment (CSA) process has been enhanced in 2022 with the implementation of an end-to-end digitalised workflow, allowing collaborative assessment on the implementation of key controls that address key risks. This would augment the basis of assurance from Management through the use of management dashboards to provide timely risk reporting. d) Risk Communication and Awareness As part of the annual risk and compliance training programme, key risk and compliance topics covering ST Engineering Code of Business Conduct and Ethics, Anti-bribery and Corruption, Personal Data Protection and Trade Compliance are shared with staff through e-learning. The RSC is updated regularly on the status of these trainings. System of Internal Control and Risk Management The Board receives, at regular intervals, updates from the Board Committees on the key business risks, the material controls to CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT 101
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