CORPORATE GOVERNANCE No material weaknesses in the systems of risk management and internal controls were identified by the Boards or the ARC in the review for FY 2023. The Boards note that the systems of risk management and internal controls established by the Managers provide reasonable assurance that CLAS, as it strives to achieve its business objectives, will not be significantly affected by any event that can be reasonably foreseen or anticipated. However, the Boards also note that no system of risk management and internal controls can provide absolute assurance in this regard, or absolute assurance against poor judgement in decision-making, human error, losses, fraud or other irregularities. Principle 10: Audit and Risk Committee At present, the ARC comprises four non-executive Directors, all of whom (including the chairman of the ARC) are IDs. The four members on the ARC are Mr Sim Juat Quee Michael Gabriel (ARC Chairman), Mr Chia Kim Huat, Ms Deborah Lee Siew Yin and Mr Max Loh Khum Whai. The ARC Chairman is a Director other than the Chairman of the Boards. The ARC Chairman and members bring with them invaluable recent and relevant managerial and professional expertise in accounting, auditing and related financial management domains. KPMG LLP are CLAS’ incumbent external auditors and will hold office until the conclusion of the upcoming AGM. It is proposed that Deloitte & Touche LLP be appointed as CLAS’ external auditors commencing from FY 2024 at the upcoming AGM. The ARC does not comprise former partners of CLAS’ incumbent external auditors, KPMG LLP, and its incoming external auditors, Deloitte & Touche LLP, respectively, (a) within a period of two years commencing from the date of their ceasing to be partners of the respective firm; or (b) who have any financial interest in the respective firm. 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 Stapled Group and any announcements relating to the Stapled Group’s financial performance; (b) reviewing and reporting to the Boards at least annually the adequacy and effectiveness of the Managers’ internal controls (including financial, operational, compliance and IT controls) and risk management systems; (c) reviewing the assurances from the Management (including the CEO and the CFO) on the financial records and financial statements; (d) reviewing the adequacy, effectiveness, independence, scope and results of the external audit and the independence and objectivity of the external auditors; (e) reviewing the adequacy, effectiveness, independence, scope and results of the internal audit and the adequacy and effectiveness of the Managers’ internal audit and compliance functions; (f) making recommendations to the Boards on the proposals to Stapled Securityholders on the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors; 120 CAPITALAND ASCOTT TRUST
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