59 Annual Report 2024 REPORT ON CORPORATE GOVERNANCE Sanctions Policy The Company is firmly committed to complying with all applicable economic sanctions laws that are legally binding upon the Group and its businesses. Any breach of sanctions may have a serious impact on our reputation, franchise, regulatory relationships and could impair the Group’s ability to provide products and services to clients. The Group has therefore established a sanctions policy that may be more stringent than what is permitted by law and regulation. The Group adopts a policy of not entering into any business or transaction that either directly or indirectly involves or is for the benefit of any Sanctioned Parties. The Group also prohibits and will not facilitate activity with certain governments or parties within certain geographies that are targeted under the sanctions programs of the United Kingdom, European Union, United States, Singapore or United Nations. The Group neither maintains a presence in these sanctioned geographies nor is it the target of these sanctions programs. As these are a direct consequence of international relations, the Group’s Sanctions Policy and specific prohibitions may change from time to time. Key Audit Matters The key audit matters in relation to the FY2024 financial statements are outlined below. Reviews include discussions with management and the external auditor, Ernst & Young LLP, and, where appropriate, the significant financial reporting matters have been addressed under the Key Audit Matters in the Independent Auditors’ Report on pages 109 to 112. Audit and Risk Committee Commentaries Key Audit Matters How the ARC reviewed these matters and what decisions were made Revenue recognition on project contracts The ARC discussed with management and the external auditor in relation to the revenue recognition on project contracts. The ARC was satisfied with the appropriateness of the project revenues recognised in the consolidated financial statements of the Group for the financial year ended 31 December 2024. Assessment on expected credit loss of trade receivables and contract assets The ARC discussed with management and the external auditor on the basis used to determine the level of expected credit loss on trade receivables and contract assets, and was satisfied that as of 31 December 2024, the level of expected credit loss for the Group was appropriate. Impairment assessment on goodwill The ARC considered the approach and methodology applied in performing the annual goodwill impairment assessment. It reviewed the key assumptions used in the discounted cash flow model such as discount rate and growth projections. The ARC was satisfied with the appropriateness of the analysis performed by management that no impairment in goodwill is required as at 31 December 2024. Internal Audit The Company has an in-house internal audit function that is independent of the activities that it audits. The ARC has also appointed KPMG to supplement the in-house IA function. KPMG is a member of the Institute of Internal Auditors (“IIA”), a professional internal auditing body affiliated to the IIA. KPMG and the in-house IA (together known as the “Internal Auditors”) work together to review the effectiveness of the key internal controls, including financial, operational, technology and compliance controls for selected scope of review annually, as approved by the ARC. The Group’s internal audit function is independent of the external audit. The Internal Auditor’s primary line of reporting is directly to the Chairman of the ARC and has unrestricted access to the Company’s documents, records, properties, and personnel of the Group. However, the in-house internal auditor also reports administratively to the Managing Director of the Company. The ARC approves the hiring, removal and evaluation of the Internal Auditors. The ARC is satisfied that the Internal Auditors have met the standards set by nationally or internationally recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by the IIA. In addition, KPMG has confirmed their independence to the ARC.
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