CORPORATE GOVERNANCE REPORT Rex International Holding Limited 137 The Rex PSP contemplates the award of such number of fully-paid shares granted under the Rex PSP (“Awards”), free of charge, to Participants after certain pre-determined benchmarks have been met. Awards granted under the Rex PSP may be time-based or performance-related. Performance targets set are based on short to medium-term corporate objectives including market competitiveness, quality of returns, business growth and productivity growth. These performance targets may include targets set based on criteria such as shareholders’ return, return on equity and earnings per share. The length of the vesting period in respect of the Awards of such number of fully-paid ordinary shares granted under the Rex PSP will be determined on a case-by-case basis by the RC. Further details on the Rex PSP were set out in the Company’s circular to shareholders dated 6 September 2023. No Awards have been granted by the Company pursuant to the Rex PSP. ACCOUNTABILITY AND AUDIT Risk Management and Internal Controls Principle 9 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. 9.1 The Board, with the assistance from the AC and the Risk Management Committee (“RMC”), is responsible for risk governance and ensuring that Management maintains a sound system of risk management and internal controls to safeguard the shareholders’ interests and the Company’s assets. The Board appreciates that risk management is an on-going process in which Management continuously participates to evaluate, monitor and report to the Board and the AC on significant risks. The RMC was formed in October 2013. The current RMC consists of the following members: Ms Mae Heng (Independent Non-Executive Director and Chairperson of the AC), Mr Per Lind (Chief Executive Officer (“CEO”)), Mr Svein Kjellesvik (Chief Operating Officer) and Ms Wu Lixian (Group Financial Controller). From FY2013 to FY2018, the Company developed and established a Board Assurance Framework (“BAF”), with the assistance of an independent third party, KPMG Services Pte. Ltd. The BAF, which includes an enterprise risk management framework, was utilised by the Company to identify and manage the significant and material risks it faces, the potential impact and likelihood of those risks occurring, the control effectiveness and action plans being taken to mitigate those risks. From FY2019 to FY2023, the risk review was done in-house. From FY2024, the Company appointed an independent third party, RSM SG Risk Advisory Pte. Ltd. (“RSM”), to perform the risk review. Please refer to page 144 of this corporate governance report for more details about RSM. The RMC has considered in detail the most material risks for the Company which include strategic, financial, operational, compliance, fraud and corruption, litigation and cyber security risks; and has put in place risk controls, action plans and key risk indicators to mitigate these risks, the details of which contain market sensitive information and hence are kept confidential. The Company has established risk appetite statements with tolerance limits to monitor shifts in its significant risks, including climate-related risks and opportunities, and to proactively manage them within acceptable levels. These appetite statements have been reviewed and approved by the Board and are monitored on a yearly basis.
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