CORPORATE GOVERNANCE REPORT • Reviews with the internal auditors the scope and results of the internal audits conducted, including the monitoring of Management’s responses to ensure appropriate and timely remediation; • Reviews and approves the internal audit and the external audit plans; • Reviews the Whistleblowing Policy and arrangements, and all significant whistleblowing cases; • Approves the composition and terms of reference of the Whistleblowing Committee. The AC Chairman chairs the Whistleblowing Committee and is supported by the Group CFO, the Group General Counsel, the Group Chief Human Resource Officer, the Group Head, R&A and the Group Head, Internal Audit (Group Head, IA); and • Reviews all material interested person transactions. The AC has the authority to investigate any matter within its terms of reference. It has full access to Management and has received full co-operation from Management. The AC also has full discretion to invite any Director or executive officer to attend its meetings, and to ensure that adequate resources are provided to enable it to discharge its functions. The Group has an inhouse internal audit function – ST Engineering Group Internal Audit (IA) which comprises a team of professionals, including the Group Head, IA, Vanessa Chen Poh Hwee, with relevant experience in corporate governance, internal controls, IT security and other relevant disciplines. The Group Head, IA reports functionally to the AC and administratively to the Group President & CEO. The AC approves the ST Engineering Internal Audit Charter and assesses at least annually, whether the internal audit function is adequately resourced and with the relevant skill sets and qualifications to carry out its duties. The AC approves decisions relating to the appointment, removal, evaluation and remuneration of the Group Head, IA. The role of IA is to provide independent and objective assurance to the AC on the adequacy and effectiveness of the Group’s governance, risk management and system of internal controls. IA also undertakes investigations as directed by the Whistleblowing Committee and has unfettered access to all documents, records, properties, and personnel, including direct access to the AC. IA also performed the internal review on the Sustainability Report for 2024 and recommendations arising from the review were taken into consideration during its development. As a corporate member of the Singapore Chapter of the Institute of Internal Auditors (IIA), IA adopts the International Standards for the Professional Practice of Internal Auditing (the IIA Standards) laid down in the International Professional Practices Framework, including its Code of Ethics. A programme of continuous improvements and quality assurance reviews are conducted to ensure that IA activities conform to the IIA Standards. Training plans and programmes are established regularly to equip IA staff with the relevant qualifications and technical knowledge so that skill sets remain relevant and current. IA adopts a risk-based approach in its annual internal audit plan, including inputs from senior management of the Group and other key stakeholders. The annual audit plan is developed using a structured framework which evaluates the inherent risk and control environment of each auditable unit within the Group. This risk-based annual audit plan is aligned with the Group’s key risks. The AC approved the internal audit plan for FY2024. The AC is satisfied that IA is independent, effective, adequately resourced and has appropriate standing within the Group. In addition, the AC reviewed the adequacy of internal control procedures including cybersecurity matters, interested person transactions and the issues raised in both the external and internal audit reports. External Auditors The appointment of external auditors is subject to approval at each AGM. In making its recommendations to shareholders on the appointment and reappointment of external auditors, the Board relies on the review and recommendations of the AC. The AC reviews the adequacy, effectiveness, independence, scope and results of the external audit and makes recommendations to the Board on the appointment, removal, remuneration and the terms of engagement of the external auditors. In this assessment, the AC considers the Audit Quality Indicators Disclosure Framework issued by the Accounting and Corporate Regulatory Authority (ACRA). In compliance with the SGX-ST Listing Manual, an audit engagement partner may only be in charge of an audit for up to five consecutive years. PricewaterhouseCoopers LLP, first appointed in 2020, meets this requirement. 100 ST ENGINEERING | ANNUAL REPORT 2024
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