Significant matter How does the Audit Committee address the matter Impairment of Inventories The Audit Committee had considered the methodology and management’s technical judgement in assessing inventory obsolescence, which includes a review of the ageing of inventory. The Audit Committee was satisfied that management’s methodology was reasonable and carrying value of inventory was appropriate. The external auditor has included this item as a key audit matter in the audit report for FY 2024. Please refer to page 105 of this Annual Report. The AC undertook a review of the independence and objectivity of the external auditors through discussions with the external auditors as well as reviewing the non-audit fees paid to them. The AC received an audit report from the external auditors setting out the non-audit services provided and the fees charged for FY 2024. A breakdown of the audit and non-audit fees paid to the Company’s auditors is disclosed on page 158 of this Annual Report. Having undertaken a review of the non-audit services provided during FY 2024, the AC is of the view that the objectivity and independence of the external auditors are not in any way impaired by reason of their provision non-audit services to the Group. The AC reviews the independence of the external auditor annually. In the selection of suitable auditing firms, the AC takes into consideration several factors such as the adequacy of the resources, experience of the accounting auditing firm, the audit engagement partner assigned to the audit, the firm’s other audit engagements, the size and complexity of the Group being audited, and the number and experience of supervisory and professional staff assigned to the audit and its ability to provide audit service to our foreign subsidiaries and associated companies. The selected auditing firm based in Singapore is engaged as auditors for the Company as well as our Singapore-incorporated subsidiaries. Different auditing firms are engaged as auditors for its associated company and 2 foreign subsidiaries for FY 2024. The AC has considered the appointment of different auditing firms for its associated company and 2 foreign subsidiaries and is satisfied that such appointment would not compromise the standard and effectiveness of the audit of these entities. The Company is thus in compliance with Rule 712 and 715 set out in Catalist Rules. Provision 10.4 of the Code: Primary reporting line of the internal audit function is to AC; Internal audit function has unfettered access to Company’s documents, records, properties and personnel The Company outsources the internal audit function to an external professional firm to perform the review and test of controls of the Group’s processes. The AC approves the appointment of the internal auditor and the internal auditor, Baker Tilly, reports directly to the Chairman of the AC. Baker Tilly is a professional services firm that specialises in the provision of Internal Audit, Enterprise Risk Management and Sustainability/ESG advisory services. The firm currently has a diverse outsourced internal audit portfolio of SGX-ST listed companies across different industries including distribution, manufacturing, services, hospitality, food & beverage, trading, retail and property development industries. Baker Tilly is a corporate member of the Institute of Internal Auditors Singapore and is staffed with qualified professionals who are Chartered Accountants or Certified Internal Auditors with deep expertise in corporate governance, risk management, internal controls and other relevant disciplines. The AC is satisfied that Baker Tilly is staffed by suitably qualified and experienced persons. The internal auditor plans its internal audit schedules in consultation with, but independent of, the Management. The internal audit plan is submitted to the AC for approval prior to the commencement of the internal audit. The internal auditor carries out their work in accordance with International Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors and has full access to the Company’s documents, records, properties and personnel. The AC will review the activities of the internal auditors, including overseeing and monitoring of the implementation of improvements required on internal control weaknesses identified. The AC has reviewed and is satisfied with the independence, adequacy and effectiveness of the Company’s internal audit function. Provision 10.5 of the Code: AC meets with the auditors without the presence of Management annually The AC endeavors to meet at least once a year with the external and internal auditors without the presence of the Management so that any concern and/or issue can be raised directly and privately. 61 ANNUAL REPORT 2024 Corporate Governance Report
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