Accountability, Audit and Tax Governance & Tax Risk Management

• Principle 9: Risk Management and Internal Controls

   
  The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders.
  
  Accountability
  F&N prepares its financial statements in accordance with the Singapore Financial Reporting Standards (International) (“SFRS (I)”) prescribed by the Accounting Standards Council. The Board is responsible for presenting a balanced and understandable assessment of the Group’s performance, position and prospects and the Board provides shareholders with financial statements and business updates in compliance with the requirements under the SGX-ST Listing Manual.
  
  The Company releases its financial results through announcements, press releases and presentation packs on SGXNet.
  
  The Company announces its financial statements on a half-yearly basis.
  
  During the year, the Company also provided voluntary business updates for the first and third quarter performance of the Group. By way of these updates, the Company kept the investing public informed of material developments concerning the Group during the relevant periods.
  
  In communicating and disseminating its results, the Company aims to present a balanced and clear assessment of the Group’s performance, position and prospects.
  
  In order to enable the Board to obtain adequate and timely information, Management provides the Board Exco with management accounts at every Board Exco meeting.
  
  Minutes of Board Exco meetings are circulated to the Board. Such updates keep the Board members informed of the Company’s and the Group’s performance, position and prospects.
  
  Sustainability and Risk Management Committee and Audit Committee
  During the year, the Board, through the AC and the SRMC, reviewed the adequacy and effectiveness of the Company’s internal controls and risk management systems. 
  
  Internal Controls
  The AC, on behalf of the Board, undertakes the monitoring and review of the system of internal controls.
  
  The AC, with the assistance of internal and external auditors and taking into consideration the review and/or assessment by the SRMC of any issues arising in respect of internal controls and risk management, reviews and reports to the Board on the adequacy and effectiveness of the Company’s system of internal controls, including financial, operational, compliance and information technology controls established by Management and highlights to the Board any significant findings. In assessing the adequacy and effectiveness of internal controls, the AC ensures primarily that key objectives are met, material assets are properly safeguarded, fraud or errors in the accounting records are prevented or detected, accounting records are accurate and complete, and reliable financial information is prepared in compliance with applicable internal policies, laws and regulations.
  
  The importance and emphasis placed by the Group on internal controls is underpinned by the fact that the key performance indicators for Management’s performance takes into account the findings of both internal and external auditors and the number of unresolved or outstanding issues raised in the process. 
  

  Risk Management Systems
  The SRMC reviews and reports to the AC and the Board on the adequacy and effectiveness of the Group’s risk management framework to ensure that robust risk management and internal controls systems are in place.
  
  The Company has adopted an enterprise-wide risk management (“ERM”) framework to enhance its risk management capabilities. An outline of the Group’s ERM framework and progress report is set out here. 
  
  Key risks, mitigating measures and management actions are continually identified, reviewed and monitored as part of the ERM process. Financial and operational key risk indicators are in place to track key risk exposures, including regulatory and sustainability risk exposure.
  
  Key business risks are thoroughly assessed by Management and each significant transaction is comprehensively analysed so that Management understands the risks involved before it is embarked upon.
  
  The SRMC is responsible for, among other things, reviewing the Group’s ERM framework, processes and procedures for identifying, measuring, reporting and mitigating key risks in the Group’s businesses and operations. 
  
  Together with the AC, the SRMC helps to ensure that Management maintains a sound system of risk management and internal controls to safeguard the interests of shareholders and the assets of the Group. The SRMC provides guidance to Management, and renders assistance to the Board to oversee the ERM framework and for determining the nature and extent of significant risks which the Board would be willing to take in achieving the Group’s strategic objectives and value creation. 
  
  The SRMC also assists the Board in carrying out its responsibility as follows:
  
  (a) to oversee the Company’s risk management framework and policies,
  (b) to determine environmental, social and governance factors (“ESG Factors”) identified as material to the business;
  (c) to monitor and manage of ESG Factors; and
  (d) to oversee the standards, management processes and strategies to implement sustainability practices in compliance with the SGX-ST Listing Manual.
  
  The SRMC is also tasked with assessing the Group’s material sustainability issues in relation to ESG Factors, as well as climate-related physical and transition risks, in line with recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”) and/or such other applicable recommendations, regulations, standards, policies and guidelines.
  
  The meetings of the SRMC serve as a forum to review and discuss material risks and exposures for the Company and the Group and the strategies to mitigate risks. The meetings of the SRMC are attended by various representatives from Management including senior management from the Company’s business divisions and members of the SDC. As disclosed above, the SDC is chaired by the Chief Executive Officer of the Company and its members include the chief executive officers of each of the Group’s business divisions and senior management across various functions. The SDC supports the SRMC by monitoring and gathering data on the Group’s sustainability priorities and initiatives with a view to regularly reporting on the progress of sustainability and climate-related strategies, projects and goals.
  
  Periodic updates are provided by senior management of the Company’s business divisions to the SRMC on the Group’s risk profile, and on the status of key enterprise risk management and business continuity initiatives. These updates include the assessment of the Group’s key risks by major business units, risk categories, and the status and changes in plans undertaken by Management to manage key risks. Risk tolerance statements, which set out the nature and extent of significant risks which the Group is willing to take in achieving its strategic objectives, are monitored and reported to the SRMC.
  
  In addition, as part of the risk management system, to assist the Company in ascertaining the adequacy and effectiveness of the Group’s internal controls, Management also maps out key risks with the existing assurance processes in a comfort matrix every year. Using a comfort matrix, the material financial, operational, compliance and information technology risks of the Company have been documented and presented against strategies, policies, people, processes, systems, mechanisms and reporting processes that have been put in place by the Group.
  
  As at 30 September 2025, the SRMC comprises the following members:

  • Mr Thapana Sirivadhanabhakdi¹ (Chairman)
  • Mr Sithichai Chaikriangkrai (Member)
  • Mr Michael Chye Hin Fah (Member)
  • Mr Kosit Suksingha (Member)
  • Mr Prapakon Thongtheppairot (Member)

  Note:
  1   As announced on 14 January 2025, Mr Thapana Sirivadhanabhakdi was appointed as Chairman of the SRMC with effect from the conclusion of the 2025 AGM.
  
  Management Assurance
  The heads of business divisions are required to provide the Company with written assurances as to the adequacy and effectiveness of their system of internal controls and risk management. The Board has received relevant assurances from:
  
  (a) Financial Records and Financial Statements
  the Chief Executive Officer of the Company, the Senior Director, Group Finance of the Company (the “Senior Director, Group Finance”), the chief executive officers of each of the Group’s business divisions, the chief financial officers or financial controllers of each of the Group’s business divisions (“Heads of Finance”) that, as at 30 September 2024, the financial records of the Group have been properly maintained and the financial statements for FY2024 give a true and fair view of the Group’s operations and finances;
  
  (b) System of Internal Controls
  the Chief Executive Officer of the Company, the Senior Director, Group Finance, the chief executive officers of each of the Group’s business divisions, the Heads of Finance and other key management personnel who are responsible in each of the Group’s business divisions, that, as at 30 September 2025, the system of internal controls in place for the Group is adequate and effective to address financial, operational, compliance and information technology risks which the Group considers relevant and material to its operations; and
  
  (c) Risk Management Systems
  the Chief Executive Officer of the Company, the Senior Director, Group Finance, the chief executive officers of each of the Group’s business divisions, the Heads of Finance and other key management personnel who are responsible in each of the Group’s business divisions, that, as at 30 September 2025, the risk management system in place for the Group is adequate and effective to address risks which the Group considers relevant and material to its operations. 
  
  Board’s Comment
  Based on the internal controls established and maintained by the Group, work performed by internal and external auditors, reviews performed by Management and the various Board Committees and the assurance from the Chief Executive Officer of the Company, the Senior Director, Group Finance and the chief executive officers of each of the Group’s business divisions, the Heads of Finance and other key management personnel who are responsible in each of the Group’s business divisions, the Board is of the view that, as at 30 September 2025, the Group’s internal controls were adequate and effective to address financial, operational, compliance and information technology risks, which the Group considers relevant and material to its operations.
  
  Based on the ERM framework established and adopted by the Company, reviews performed by Management and the SRMC and assurance from the Chief Executive Officer of the Company, the Senior Director, Group Finance, the chief executive officers of each of the Group’s business divisions, the Heads of Finance and other key management personnel who are responsible in each of the Group’s business divisions, the Board is of the view that, as at 30 September 2025, the Group’s risk management system was adequate and effective to address risks which the Group considers relevant and material to its operations.
  
  Board's Comments
  Based on the internal controls established and maintained by the Group, work performed by internal and external auditors, reviews performed by Management and the various Board Committees and the assurance from the Chief Executive Officer of the Company, the Senior Director, Group Finance and the chief executive officers of the Group’s business divisions, the Heads of Finance and other key management personnel who are responsible in each of the Group’s business divisions, the Board is of the view that, as at 30 September 2025, the Group’s internal controls were adequate and effective to address financial, operational, compliance and information technology risks, which the Group considers relevant and material to its operations.
  
  Based on the ERM framework established and adopted by the Company, reviews performed by Management and the SRMC and assurance from the Chief Executive Officer of the Company, the Senior Director, Group Finance, the chief executive officers of the Group’s business divisions, the Heads of Finance and other key management personnel who are responsible in each of the Group’s business divisions, the Board is of the view that, as at 30 September 2025, the Group’s risk management system was adequate and effective to address risks which the Group considers relevant and material to its operations.
  
  The Board notes that the system of internal controls and risk management provides reasonable, but not absolute, assurance that the Group will not be adversely affected by any event that could be reasonably foreseen as it works to achieve its business objectives. In this regard, the Board also notes that no system of internal controls and risk management can provide absolute assurance against the occurrence of material errors, poor judgment in decision-making, human error, losses, fraud or other irregularities.
  
  The AC concurs with the Board’s view that as at 30 September 2025, the Group’s internal controls (including financial, operational, compliance and information technology controls) and risk management systems were adequate and effective to address risks which the Group considers relevant and material to its operations.

• Principle 10: Audit Committee

   
  The AC is made up of non-executive Directors, the majority of whom, including its Chairman, are independent Directors. The members of the AC, including its Chairman, are appropriately qualified and have recent and/or relevant accounting and related financial management expertise or experience. Their collective wealth of experience and expertise in accounting and financial management enables them to discharge their responsibilities competently.
  
  The AC has reasonable resources to enable it to discharge its functions effectively.
  
  The AC, on behalf of the Board, undertakes the monitoring and review of the system of internal controls. Its main responsibilities are to assist the Board in fulfilling its responsibility for overseeing the quality and integrity of the financial reporting system, audit of internal controls systems and processes, risk management and financial practices of the Company and the Group. Significant findings are reported to the Board.
  
  The AC is guided by written Terms of Reference endorsed by the Board which clearly set out its authority and duties. It is duly authorised to investigate any matter within such Terms of Reference, and has full access to and the co-operation of Management, as well as the full discretion to invite any Director or executive officer to attend its meetings. 

  As at 30 September 2025, the AC comprises the following three members: 

  • Mr Ng Tat Pun (Chairman)
  • Mr Chan Heng Wing (Member)
  • Mr Sithichai Chaikriangkrai (Member)

  Under the Terms of Reference of the AC, a former partner or director of the Company’s existing auditing firm or auditing corporation shall not act as a member of the AC (i) within a period of 2 years commencing on the date of his ceasing to be a partner of the auditing firm or director of the auditing corporation; and in any case (ii) for so long as he has any financial interest in the auditing firm or auditing corporation. None of the members of the AC were previous partners or directors of the Company’s auditor, KPMG LLP (“KPMG”), and none of the members of the AC hold any financial interest in KPMG. 
  
  During the year, the key activities of the AC included the following:

  • Reviewing the financial statements and related SGX-ST announcements, including the external auditors’ report for the full-year and significant financial reporting issues and assessments, to safeguard the integrity in financial reporting, and to ensure compliance with the requirements of the SFRS (I). In the review of the financial statements, the significant matters referred to in Table A were reviewed by the AC and discussed with management and external auditors.
  • Reviewing and approving the internal and external audit plans to ensure the adequacy of the audit scope. 
  • Recommending, for the approval of the Board, the financial results and related SGX-ST announcements.
  • Reviewing the independence, adequacy and effectiveness, scope and results of the Group’s internal audit function, including the adequacy of internal audit resources and its appropriate standing within the Group.
  • Assessing the independence and objectivity of the external auditors and the quality of the work carried out by the external auditors, using, as a basis, the Audit Quality Indicators Disclosure Framework published by the Accounting and Corporate Regulatory Authority of Singapore.
  • Reviewing the assurance from the CEOs and the Heads of Finance of each of the Group’s significant business divisions and the Company’s Director, Group Finance on the financial records and financial statements.
  • Reviewing with internal and external auditors, the scope and results of the audit reports and their recommendations, and monitoring the timely and proper implementation of any required corrective or improvement measures.
  • Reviewing and evaluating with internal and external auditors, and reporting to the Board at least annually on the adequacy and effectiveness of internal control systems, including financial, operational, compliance and information technology controls and together with SRMC, risk management systems.
  • Reviewing the whistle-blowing policy and any whistle-blowing investigations within the Group and ensuring appropriate follow-up actions, if required.

  The AC also meets with internal audit and KPMG in each case, without the presence of management at least once a year, to obtain feedback on the competency and adequacy of the finance function, to review the assistance given by the Company’s management to internal and external auditors and to ascertain if there are any material weaknesses or control deficiencies in the Group’s financial reporting and operational systems. In addition, updates (if any) on changes in accounting standards and treatment are prepared by KPMG and circulated to members of the AC.
  
  The AC reviews and approves the remuneration and terms of engagement of KPMG. The AC also makes recommendations to the Board regarding the appointment, re-appointment and removal of the Company’s external auditor. Upon the Board’s approval, the relevant recommendations are tabled for approval by shareholders.
  
  During the year, the AC conducted a review of the adequacy, effectiveness, scope and results of audit by KPMG, and their cost effectiveness, as well as the independence and objectivity of KPMG. It also reviewed all non-audit services provided by KPMG, and the aggregate amount of audit fees paid/payable to them. For details of fees paid/payable to KPMG in respect of audit and non-audit services, please refer to Note 5 of the Notes to the Financial Statements on page 138 of F&N's Annual Report 2025. The AC is also satisfied with the aggregate amount of audit fees paid to KPMG. Accordingly, the AC has recommended the re-appointment of KPMG at the 2025 AGM. In recommending the re-appointment of the auditors, the AC considered and evaluated a variety of factors including the audit engagement partner to be assigned to the audit, the number and experience of supervisory and professional staff to be assigned to the audit and the size and complexity of the Group, its business and operations.
  
  The Company has complied with Listing Rule 712 of the SGX-ST Listing Manual which requires, amongst others, that a suitable auditing firm be appointed by the Company to meet its audit obligations. The Company has also complied with Listing Rule 715 read with Listing Rule 716 of the SGX-ST Listing Manual in relation to its auditing firms. For purposes of Listing Rule 715(1) of the SGX-ST Listing Manual, where auditing firms other than the Company’s external auditors are appointed for its Singapore-incorporated subsidiaries, the Board and the AC are satisfied that such appointment would not compromise the standard and effectiveness of the audit of the Company. 
  
  Whistle-Blowing Policy
  The Group has in place a Whistle-Blowing Policy (“Policy”) which provides an independent feedback channel through which matters of concern about any possible improprieties, misconduct or wrongdoing relating to the Company may be raised by staff and any other person in confidence and in good faith, without fear of reprisal.
  
  Whistle-blowers may report any matters of concern by mail, electronic mail or by calling a hotline, details of which are provided in the Whistle-Blowing Policy, which is available on the Company’s website. The Company will treat all information received confidentially and protect the identity of all whistle-blowers. The Company is committed to ensuring that whistle-blowers will be treated fairly and protected from reprisal actions or any detrimental or unfair treatment for whistle-blowing in good faith. Details of this Whistle- lowing Policy and the procedures for raising concerns have been disseminated and made available to all employees.
  
  The improprieties that are reportable under the Whistle-Blowing Policy include:
  
  (a) financial or professional misconduct;
  (b) improper conduct, dishonest or unethical behaviour;
  (c) any irregularity or non-compliance with laws/regulations or the Company’s procedures, policies and codes of conduct including but not limited to those relating to financial reporting, accounting, audit and/or internal controls;
  (d) violence at the workplace, or any conduct that may threaten health and safety;
  (e) conflicts of interest;
  (f) corruption or bribery;
  (g) mismanagement of the Company’s resources;
  (h) conduct that may cause loss (whether financial or otherwise) to the Company;
  (i) sexual harassment; and
  (j) any other improprieties or matters that may adversely affect shareholders’ interests in, and assets of, the Company and its reputation.
  
  All whistle-blowing complaints are independently investigated and appropriate actions will be taken. In particular, if it is determined that the complaint or report falls within the scope of the Whistle-Blowing Policy, the AC may delegate the task of investigation to a senior member of Management whom it considers to have sufficient independence and objectivity to oversee the investigation, and/or an independent third party. The AC, which is responsible for oversight and monitoring of whistle-blowing, reviews and ensures that independent investigations and any appropriate follow-up actions are carried out (including reporting to the Board of any significant matters raised through the whistle-blowing channel).
  
  Internal Audit
  The Internal Audit Department (“IA Department”) is an independent function within the Company. It conducts objective and independent assessments on the adequacy and quality of the Group’s system of internal controls. The Head of Internal Audit (“Head of IA”), who is a Chartered Accountant of Singapore, reports directly to the AC. Under its Terms of Reference, the AC has the authority to approve the hiring, removal, evaluation and compensation of the Head of IA. 
  
  The Head of IA and most of the internal audit staff are members of the Institute of Internal Auditors, Singapore. The IA Department has adopted and complied with the new Global Internal Audit Standards (“GIAS”) set by the Institute of Internal Auditors and which took effect on 9 January 2025. To ensure that the internal audits are effectively performed, it recruits and employs suitably qualified staff with the requisite skills and experience. Such staff are also given relevant training and development opportunities to update their technical knowledge and auditing skills. Key staff members of the IA Department also attend relevant technical training and seminars organised by the Institute of Internal Auditors, Singapore and other professional bodies.
  
  The IA Department operates within the framework stated in its Internal Audit Charter, which is approved annually by the AC. The IA Department has unfettered access to all the Company’s documents, records, properties and personnel including access to the AC. The IA Department adopts a risk-based audit methodology to develop its audit plans, and its activities are aligned to key risks of the Group. Based on risk assessments performed, greater focus and appropriate review intervals are set for higher risk activities, and material internal controls, including compliance with the Company’s policies, procedures and regulatory responsibilities.
  
  During the year, the IA Department conducted its audit reviews based on the internal audit plan approved by the AC. At each quarterly meeting with the AC, the Head of IA presents on the status of the internal audit plan and proposes adjustments to the plan with a view to enhancing agility and relevance of audits performed. All audit reports detailing audit findings and recommendations are provided to management who would respond on the actions to be taken. The audit reports are also circulated to the AC and the external auditors. Each quarter, the IA Department also presents to the AC, a summary of the key audit findings and actions taken by management on such findings, including tracking of implementation of audit recommendations for past audit reports to ensure proper closure of agreed action plans by management. The AC monitors the timely and proper implementation of required corrective, preventive or improvement measures undertaken by management.
  
  The IA Department also conducts an internal review of the Group’s sustainability reporting process. Such review is conducted based on the internal audit plan approved by the AC. With a view to ensuring reliability, data accuracy and data integrity in the Company’s sustainability reporting process, the internal review of the sustainability reporting process focuses on the design of internal controls and compliance by each auditable entity, with relevant laws, policies and procedures.
  
  The IA Department has a Quality Assurance and Improvement Programme (“QAIP”) in place to ensure that its audit activities conform to the IIA Standards. An external Quality Assurance Review (“QAR”) is carried out at least once every five years by qualified professionals from an external consulting firm to be approved by the AC. Based on last external QAR that was carried out by Ernst & Young Advisory Pte Ltd (“EY”) during the financial year ended 30 September 2023 , the internal audit function has been rated to have conformed with the IIA Standards. The benchmarking exercise conducted by EY as part of the external QAR, has assessed the IA Department to be a “Progressive” function when benchmarked against leading internal audit functions globally and across sectors.
  
  As part of the QAIP, in addition to the external QAR, an internal self-assessment QAR which is typically conducted every two years, was completed during the financial year ending 30 September 2025. 
  
  The AC is satisfied that the internal audit function is independent and effective and that the IA Department has adequate resources and appropriate standing within the Company to perform its function effectively. 

• Tax Governance and Tax Risk Management Policy

  
  Introduction
  Good corporate governance has been and continues to be the foundation on which Fraser and Neave, Limited ("F&N") operates. The firm commitment of the F&N Group to set and maintain high standards of corporate governance and corporate transparency can be seen in its sound corporate policies, business practices and internal controls. As part of this commitment, F&N has established this Tax Governance and Tax Risk Management Policy that articulates the F&N Group’s policy to manage its tax risks and safeguard shareholders’ interests while pursuing sustainable business growth.
  
  Responsible Tax Management
  F&N is committed to complying with applicable tax laws and regulations, and to building and maintaining a collaborative and constructive relationship with the tax authorities, across the jurisdictions we operate in. F&N’s Board of Directors provides oversight of tax governance and tax risk management.
  
  The Head of Group Finance with the support from Group Tax, comprising the Head of Group Tax and a team of qualified tax professionals with the necessary skills and knowledge, oversees the F&N Group’s tax function and establishment of effective tax risk management policies as well as practices.
  
  Tax Governance
  

  1. Approach to Tax Compliance
  F&N is committed to comply with all relevant tax laws and regulations in the jurisdictions where we operate, and to adhere to applicable international standards and guidelines.

  F&N endeavours to prepare and file all relevant tax returns timely and accurately in accordance with applicable local tax laws and regulations. We are committed to pay the right amount of tax in the jurisdictions we operate in, according to where value is created, and profits are made. We also maintain records and documentation in accordance with relevant Group policy(ies). In turn, this facilitates our compliance with requirements under applicable local law in the jurisdictions we operate in.\
  
  2. Approach to Tax Risk Management
  F&N’s tax governance and tax risk management framework lays out the Group’s core tax principles, has clearly defined roles and responsibilities concerning the tax function and institutionalises tax learning and development for F&N employees. The core tax principles are as follows:

  (a)	Good Corporate Citizen
  	F&N believes in being a good corporate citizen and is committed to paying its fair share of taxes across the countries it operates in.
  (b)	Business Conduct
  	F&N aspires to conduct its business and operations underpinned by bona fide commercial motivations and to factor tax implications into the decision-making process of significant business transactions. We do not knowingly engage in tax planning or tax structures that are illegal and/or intended for tax avoidance. F&N strives to conduct inter-company transactions at arm’s length which would be supported by transfer pricing documentation, where applicable.
  (c)	Tax Competencies, Learning and Development
  	Group Tax is staffed by a team of qualified tax professionals with the necessary skills and knowledge to comply and advise on tax compliance and tax planning matters. On an ongoing basis, Group Tax endeavours to keep up to date with continuous professional education hours requirements and relevant tax certifications.Group Tax also monitors changes and updates to tax laws and regulations to assess the impact on the Group. Where appropriate, we will seek professional advice from qualified external advisors and practitioners.
  (d)	Controls and Oversight
  	To help the Group keep pace with regulatory changes in tax matters, we have established procedures in place, including escalation and approval procedures relating to tax compliance, tax controversy, tax planning and other advisory matters. Where possible, to facilitate ease of adoption, these procedures are set out in systematic flow charts, which are periodically reviewed and updated as necessary by Group Tax. Group Tax evaluates and monitors tax issues and risks faced by the Group and provides updates, if required, to the Audit Committee. Group Tax also conducts half-yearly reviews with Group Risk department to highlight macro tax risk issues for enterprise risk management reporting purposes. Furthermore, Group Tax assists relevant stakeholders in considering, evaluating and communicating key tax risks and implications of transactions.

  
  3. Relationship with Tax Authorities
  F&N is committed to build and maintain a transparent, collaborative and constructive relationship with the tax authorities across the jurisdictions we operate in, based on respect and trust. Besides ensuring compliance to applicable tax laws and regulations and tax filing requirements, we strive to provide timely responses to any reasonable information requests from tax authorities. Where appropriate, we will seek clarifications or rulings from tax authorities where there is significant uncertainty on material transactions or interpretation of tax laws relevant to our business.