appointment of Deloitte as external auditors is set out in the Notice of AGM dated 28 March 2024 under Ordinary Resolution 2 and in the Letter to Unitholders dated 28 March 2024. The incumbent external auditors, KPMG LLP will be retiring and will not be seeking re-appointment as external auditors of CLCT for FY 2024. The ARC holds at least four scheduled meetings in a year and met five times in FY 2023. At all scheduled ARC meetings in FY 2023, the CEO and the CFO were in attendance. CLCT has adopted the practice of announcing its financial statements on a half yearly basis and provides quarterly business updates in between such announcements or as and when necessary. Accordingly, during the ARC meetings in January 2023 and July 2023, among other things, the ARC reviewed the half-yearly financial statements including the relevance and consistency of the accounting principles adopted and any significant financial reporting issues, and recommended the half-yearly financial statements and corresponding announcements to the Board for approval. During the ARC meetings in April 2023 and October 2023, the ARC reviewed, among other things, the quarterly business and financial updates presented by Management. Such business updates contained, among other things, information on the CLCT Group’s key operating and financial metrics. In FY 2023, the ARC also reviewed and assessed the adequacy and effectiveness of the internal controls and risk management systems established by the Manager to manage risks, taking into consideration the outcome of reviews conducted by Management and both the internal and external auditors, as well as the assurances from the CEO and the CFO. The ARC also meets with the external auditors and with the internal auditors, in each case without the presence of Management, at least once a year. In FY 2023, the ARC met with the external auditors and internal auditors twice, separately and without Management’s presence, to discuss the reasonableness of the financial reporting process, the internal controls and risk management systems, and the significant comments and recommendations by the auditors. Where relevant, the ARC makes reference to the best practices and guidance for audit committees in Singapore including practice directions issued from time to time in relation to the Financial Reporting Surveillance Programme administered by the Accounting and Corporate Regulatory Authority of Singapore. Key Audit Matter In its review of the financial statements of the CLCT Group for FY 2023, the ARC had discussed with Management the accounting principles that were applied and their judgement of items that could affect the integrity of the financial statements and also considered the clarity of key disclosures in the financial statements. The ARC reviewed, among other matters, the key audit matter set out below, as reported by the external auditors for FY 2023. Key audit matter How this issue was addressed by the ARC Valuation of investment properties The valuation of the properties in CLCT’s portfolio as at 31 December 2023 was performed by several independent external professional valuers. After conducting a review, the ARC was satisfied that the appointment of these valuers was in accordance with the requirements of the Code and that these valuers were experienced, objective and independent. The ARC considered the valuation methodologies and key assumptions applied by these valuers for investment properties in arriving at the valuations, and reviewed the outcomes of the yearly valuation process and discussed the details of the valuation with Management, focusing on properties which registered higher fair value gains/ losses during the period under review and key drivers for the changes. The valuation of investment properties was also an area of focus for the external auditors. The ARC considered the findings of the external auditors, including their assessment of the appropriateness of valuation methodologies and the underlying key assumptions applied in the valuation of investment properties. The ARC was satisfied with the valuation process, the methodologies used and the valuation for investment properties as adopted and disclosed in the financial statements. ANNUAL REPORT 2023 135 Financials Framework Portfolio Performance Leadership Overview
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