Principle 10: Audit and Risk Committee The Audit Committee was renamed the Audit and Risk Committee with effect from 1 January 2024. As at the date of this Annual Report, the ARC comprises four non-executive Directors, all of whom (including the chairman of the ARC) are IDs, namely Mr Neo Poh Kiat (ARC chairman), Professor Ong Seow Eng, Ms Tay Hwee Pio and Ms Wan Mei Kit. The ARC chairman is a Director other than the Chairman of the Board. The ARC chairman and other ARC members bring with them invaluable recent and relevant managerial and professional expertise in accounting, auditing and/or related financial management domains. In FY 2023, the ARC does not comprise former partners of CLCT’s incumbent external auditors, KPMG LLP (a) within a period of two years commencing from the date of their ceasing to be partners of KPMG LLP; or (b) who have any financial interest in KPMG LLP. The ARC has explicit authority to investigate any matter within its terms of reference. Management provides the fullest co-operation in providing information and resources, and in implementing or carrying out all requests made by the ARC. The ARC has direct access to the internal and external auditors and full discretion to invite any Director or key management personnel to attend its meetings. Similarly, both the internal and external auditors have unrestricted access to the ARC. Under its terms of reference, the ARC’s scope of duties and responsibilities includes: (a) reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Manager and CLCT and any announcements relating to CLCT’s financial performance; (b) reviewing and reporting to the Board at least annually the adequacy and effectiveness of the Manager’s internal controls (including financial, operational, compliance and IT controls) and risk management system; (c) reviewing the scope and results of the external audit and the adequacy, effectiveness, independence and objectivity of the external auditors; (d) reviewing the scope and results of the internal audit and the adequacy, effectiveness, independence and objectivity of the Manager’s internal audit and compliance functions; (e) making recommendations to the Board on the proposals to Unitholders on the appointment, re- appointment and removal of the external auditors, and approving the remuneration and scope of engagement of the external auditors; (f) reviewing and approving processes to regulate transactions between an interested person (as defined in Chapter 9 of the Listing Manual) and/or interested party (as defined in the Property Funds Appendix) (each, an Interested Person) and CLCT and/or its subsidiaries (Interested Person Transactions), to ensure compliance with the applicable regulations. The regulations include the requirements that Interested Person Transactions are on normal commercial terms and are not prejudicial to the interests of CLCT and its minority Unitholders. In respect of any property management agreement which is an Interested Person Transaction, the ARC also carries out reviews at appropriate intervals to satisfy itself that the Manager has reviewed the property manager’s compliance with the terms of the property management agreement and has taken remedial actions where necessary; and (g) reviewing the policy and arrangements for concerns about possible improprieties in financial reporting or other matters to be safely raised, and independently investigated, for appropriate follow-up action to be taken. In addition to the above, the ARC also reviews the assurance from the CEO and the CFO on the financial records and financial statements. The ARC undertook a review of the independence of the external auditors, taking into consideration, among other factors, non-audit services (if any) provided by the external auditors in FY 2023, CLCT’s relationships with the external auditors in FY 2023, as well as the processes and safeguards adopted by the Manager and the external auditors relating to audit independence. Based on the review, the ARC is satisfied that the external auditors are independent. The external auditors have also provided confirmation of their independence to the ARC. The amount of audit and audit-related fees paid or payable to the external auditors for FY 2023 amounted to S$915,820. The external auditors did not provide any non-audit services in FY 2023 and accordingly, no nonaudit fees were paid in FY 2023. As part of CLCT’s ongoing good corporate governance initiatives, the Board has concurred with the ARC’s recommendation for the proposed appointment of Deloitte & Touche LLP (Deloitte) as the independent external auditors of CLCT which is being tabled for approval at the upcoming AGM. Further details on the proposed CORPORATE GOVERNANCE 134 CAPITALAND CHINA TRUST
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