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 2025. 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 2025, 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 2025. 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. The ARC is satisfied that the Internal Audit function is adequately resourced and has the appropriate standing within the Company. The ARC has reviewed the adequacy and effectiveness of the in-house IA at least annually and is satisfied that the inhouse IA is adequate and effective and has maintained its independence from the activities that he audit. The Internal Auditors adopts a risk-based auditing approach in formulating the annual audit plan which aligns its activities to the key risks across the Group’s business. The reviews performed by the Internal Auditors are aimed at assisting the Board in evaluating the adequacy and effectiveness of risk management, controls and governance processes. During the year, the Internal Auditors conducted its audit reviews based on the annual internal audit plan which was approved by the ARC. The annual internal audit plan incorporates the audit of key risk areas identified under the Group’s Enterprise Risk Management framework. Each quarter, the Internal Auditors would submit a report to the ARC on the key audit findings and actions to be taken by Management on such findings. Key findings are also highlighted at ARC Meetings for discussion and follow up actions. The ARC monitors the timely and proper implementation of the required corrective, preventive or improvement measures to be undertaken by Management. REPORT ON CORPORATE GOVERNANCE ANNUAL REPORT 2025 57
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