OVERVIEW PERFORMANCE SUSTAINABILITY FINANCIALS APPENDIX 153 152 PERENNIAL HOLDINGS PRIVATE LIMITED ANNUAL REPORT 2025 Corporate Governance of the Board in all aspects of its role. He facilitates the relationship and information flow within and between the Board and Management, sets the agendas for Board meetings with inputs from Management, ensures sufficient allocation of time for thorough discussion of each agenda item at Board meetings, and engages the Board and Management in effective discussions. The Executive Chairman and CEO also promotes an open environment for deliberation and ensures that the Board meetings are conducted objectively and professionally, where all views are heard and debated in a fair and open manner. At the same time, the Executive Chairman and CEO also monitors follow-up to the Board’s decisions and ensures that such decisions are translated into executive actions. In addition, the Executive Chairman and CEO works with the Board, the Board Committees and Management to establish risk limits undertaken by the Group and, at the same time, promotes high standards of integrity and corporate governance. He also provides leadership, guidance and advice to Management, particularly with regard to the Group’s growth strategy and developments. The Executive Chairman and CEO, assisted by Management, makes strategic proposals to the Board and, after robust Board discussions, executes the agreed strategies and policies, manages and develops the Group’s businesses and implements the Board’s decisions. The Executive Chairman and CEO is responsible for effectively managing and supervising the day-to-day business operations, reporting to the Board on all aspects of the operations and performance, managing and cultivating good relationships with all stakeholders and ensuring effective communication with the stakeholders. All major proposals and decisions relating to the business of the Group made by the Executive Chairman and CEO are reviewed jointly and collectively by the Board. As such, there is a balance of power and authority and no one individual controls or dominates the decisionmaking process of the Company. The Co-Vice Chairmen have the duty to provide leadership in situations where the Executive Chairman and CEO faces any real or perceived conflict of interest. The Co-Vice Chairmen are also available to stakeholders of the Company through their email address covicechairmen@ perennialholdings.com should they have concerns relating to the Company and for which contact through the normal channels has failed or is inappropriate. This ensures effective oversight, appropriate balance of power and increased accountability. ACCOUNTABILITY AND AUDIT The Group believes that strict compliance with statutory reporting requirements and the adoption of good business practices are imperative to maintaining confidence and trust in the Group and, at the same time, delivering sustainable value to its stakeholders. The Board regularly receives operational and financial reports regarding the Group’s performance, which includes key performance indicators, variance analyses, property updates, strategic and business highlights, and key developments to enable it to keep abreast and make a balanced and informed assessment of the Group’s performance, financial position and prospects. The Group provides shareholders with voluntary updates on the Group’s interim business performance, as and when necessary. The Board is also updated on relevant changes to rules, regulations and accounting standards so that it can monitor and supervise the Group to comply with the relevant regulatory requirements. Management also highlights key business indicators and major issues relevant to the Group’s performance from time to time to enable the Board to make a balanced and informed assessment of the Group’s performance, position and prospects. Risk Management The Group recognises that a robust risk management and internal control system to safeguard its assets and shareholders’ interests is imperative to maintaining stakeholders’ confidence and trust in the Group and, at the same time, delivering sustainable value to its stakeholders. The Group proactively manages risks and embeds the risk management process into all planning and decision-making processes, as well as in the day-to-day operations at the Company and Group levels. The Board sets the overall strategic direction, governs the risk management strategy, and determines the risk appetite and risk policies for the Group. With these controls in place, the Board oversees Management in the design, implementation and monitoring of risk management and internal control systems, thereby ensuring that strategies are aligned with the risk appetite, as well as any potential emerging risks that the Group may face. The Board reviews, whenever necessary, the key organisational risks and robustness of the Group’s risk management and internal control systems, including financial, operational, compliance, anti-money laundering, counter financing of terrorism and information technology (“IT”) controls. The Board also decides on the risk tolerance limits and other associated risk parameters and determines the nature and extent of the significant risks that the Board is willing to assume in achieving the Group’s strategic objectives and value creation. The Group understands that its business environment presents opportunities that require preparation and planning in order for these opportunities to be seized, as well as uncertainties that need to be actively managed. Management, responsible for implementing day-to-day management of risks in the Group, reports to the Board on the key risks and provides updates on the risk management activities of the business. The Board regularly reviews the key risk indicators and discusses the status of risk exposure and risk management action plans. The Board is satisfied that the Group’s risk management system continues to be adequate and effective. Internal Controls Supporting the risk management strategy is a system of internal controls comprising Group-wide governance and internal control policies, procedures and guidelines which cover financial, operational, anti-money laundering, counter financing of terrorism, IT and regulatory compliance matters. Such internal control mechanisms include segregation of duties, approval authorities and limits, and checks and balances embedded in business processes. The implementation of the Whistleblowing Policy, Code of Conduct and Code of Ethics also helps to establish a clear tone from Board with regard to employees’ business and ethical conduct. This system of internal controls is regularly reviewed for continuous improvement and strengthening. Internal and external auditors conduct audits that involve testing the adequacy and effectiveness of material internal controls. Such audits provide an independent assessment and assurance of the reliability, adequacy and effectiveness of the Group’s system of internal controls, risk management procedures, governance framework and processes. Any material non-compliance or lapses in internal controls, together with corrective measures recommended by internal and external auditors, are reported to the Board. The adequacy, timeliness and effectiveness of the measures taken by Management in response to the recommendations made by the internal and external auditors are also reviewed by the Board. The results of these audits serve to provide the basis for analysis of the adequacy of the Group’s internal controls. Duties of the Board The Board also ensures relevancy and compliance with good corporate governance and best practices. In particular, the Board: • reviews significant financial reporting issues and key areas of management judgment so as to ensure the integrity of the financial statements of the Group; • reviews, at least annually, the adequacy and effectiveness of the Group’s internal controls, including financial and accounting, operational and compliance; • reviews the effectiveness, independence and adequacy of the internal audit (“IA”) function, the scope and results of the audit reviews, the annual IA plan (the “IA Plan”) and the IA reports, including the adequacy of IA resources and its appropriate standing within the Group; • oversees the implementation of the improvements required on internal control weaknesses identified and ensures that Management provides the necessary cooperation to enable the internal auditors to perform their function; • reviews the scope and results of the external audit, the audit reports and the independence and objectivity of the external auditors taking into consideration the requirements under the Accountants Act 2004 of Singapore, including but not limited to, the aggregate and respective fees paid for audit and non-audit services and the cooperation extended by Management to allow effective audits; • considers and approves the appointment, re-appointment and removal of external and internal auditors, and approves the remuneration and terms of engagement of the external and internal auditors; • monitors the Group’s compliance with laws and regulations, particularly those of the Companies Act; • reviews the Whistleblowing Policy and arrangements put in place by which staff and external parties may, in confidence, raise probable improprieties in matters of financial reporting or other matters, with the objective that arrangements are in place for the independent investigation of such matters and for appropriate follow up actions; • oversees the procedures established to regulate interested person transactions; • reviews and approves, where relevant, material matters, findings, and recommendations; and • deliberates on and approves resolutions relating to conflicts of interest situations involving the Group and its vendors. The Board has separate and independent access to the Company Secretary, Management, and reasonable resources to enable it to discharge its functions properly, as well as the explicit authority to investigate any matter within its terms of reference. Management is required to provide the fullest co-operation in furnishing information and resources in carrying out all requests made by the Board. The Board also has separate and independent access to internal and external auditors, as well as the discretion to invite any executive officer to attend its meetings. Both the internal auditors and external auditors are also given unrestricted access to the Board. The Board is also authorised to engage any firm of accountants, lawyers, or other external independent professionals as it sees fit to provide independent advice to assist in the review or investigation of such matters within its terms of reference as it deems appropriate, at the expense of the Group. Changes to accounting standards and issues which have a direct impact on financial statements are updated by Management during Board meetings. Key Audit Matters In the review of the financial statements, the Board will discuss with Management, the accounting policies that are adopted and applied. The Board will also consider the judgments and estimates made by Management that might affect the integrity of the financial statements. Where the external auditors, in their audit of the Group’s year-end financial statements, raise any significant issues (for example, significant adjustments) which have a material impact, Management will bring this to the Board’s attention immediately. External Auditors The Board evaluates the performance of the external auditors and is satisfied with the quality of the work carried out by the external auditors. No former partner or director of the Group’s existing auditing firm or auditing corporation is a member of the Board. On 1 August 2025, the Company appointed EY as the Auditors of the Company, in place of KPMG LLP who resigned as the Auditors of the Company on 1 August 2025, after having served as the Company’s external auditors for almost 11 years. The appointment of new auditors enables the Group to benefit from fresh perspectives and views of another professional audit firm, thus enhancing the quality of the audit of the Group. In reviewing the appointment of EY as Auditors of the Company, the Board has taken into consideration the adequacy of resources, experience, and competence of EY, as well as the quality of audits performed. Satisfied that EY has demonstrated appropriate expertise and is adequately resourced, the Board approved the appointment of EY as the Group’s external auditors. Internal Auditors The IA function assists the Board in providing an independent and objective evaluation of the adequacy and effectiveness of the system of internal controls. It also performs reviews to examine the safeguarding of assets, the timeliness and accuracy in the recording of transactions, compliance with relevant laws, regulations and policies established by the Group, as well as the steps taken by Management to address control deficiencies. The team adopts a risk-based methodology in drawing up the IA Plan. The IA Plan is planned in consultation with, but independently of, Management. Key considerations for the IA Plan include risk exposures, operating concerns and compliance with regulations, policies, and procedures. The IA Plan includes, amongst others, the audit scope, objectives, and resources to be allocated for the audits. The IA Plan is submitted to the Board for review and approval to ensure that the audit scope set out in the IA Plan is sufficient to review the significant risks and internal controls of the Group. The internal controls comprise financial, operational and compliance. All IA reports, containing identified issues and corrective action plans, are submitted to the Board for deliberation, with copies of these reports extended to the Executive Chairman and CEO, and relevant Management. The IA function follows up regularly with Management on the action plans and ensures that proposed action plans have been adequately completed. The IA function is staffed with persons with the relevant qualifications and experience. For the year under review, the Board is satisfied that the IA function was independent, effective, adequately resourced and has appropriate standing within the Group. Conduct of Business The Board and Management are committed to conducting business with integrity that is consistent with high standards of business ethics, as well as in compliance with all applicable laws and regulatory requirements. The Group has in place internal policies on employees’ conduct, corporate gift guidelines and grievance handling procedures. These policies crystallise the Group’s business principles and practices that are expected of its employees with respect to matters which may have ethical implications, such as corruption, bribery, conflicts of interest, misappropriation of assets, violation of law and regulations, non-compliance with other policies and procedures, abuse of position and other misconduct.
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