Overview Leadership Portfolio & Performance Sustainability & Governance Financial Statements and Other Information (g) 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 CLAS 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 CLAS and its minority Stapled Securityholders. 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 Managers have reviewed the property manager’s compliance with the terms of the property management agreement and has taken remedial actions where necessary; and (h) 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. The ARC undertook a review of the independence of the external auditors, taking into consideration, among other factors, the non-audit services provided, CLAS’ relationships with the external auditors in FY 2023, as well as the processes and safeguards adopted by the Managers and the external auditors relating to audit independence. Based on the review, the ARC is satisfied that the independence of the external auditors is not affected by the provision of the non-audit services. The external auditors have also provided confirmation of their independence to the ARC. The amount of fees paid or payable to the external auditors for FY 2023 amounted to S$3,862,000, of which audit (and audit-related) fees amounted to S$3,658,000 and non-audit fees amounted to S$204,000. KPMG LLP was appointed as the external auditors for CLAS and its Singapore-incorporated subsidiaries and significant associated companies. Stapled Securityholders’ approval was obtained for their re-appointment at the last AGM on 18 April 2023. KPMG LLP will hold office until the conclusion of the upcoming AGM. The ARC has assessed the performance of the external auditors based on factors such as the performance and quality of their audit and the independence of the auditor. As part of CLAS’ ongoing good corporate governance initiatives, the Board has concurred with the ARC’s recommendation for the proposed appointment of Deloitte & Touche LLP as the independent external auditors of CLAS at the upcoming AGM of the Stapled Securityholders. Further details on the proposed change of external auditors is set out in the Managers’ notice of AGM dated 28 March 2024 and the Letter to Stapled Securityholders dated 28 March 2024 (in relation to the proposed change of external auditors). The incumbent external auditors, KPMG LLP, will be retiring and will not be seeking re-appointment as external auditors 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. CLAS announces 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 Boards 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 contain, among other things, information on CLAS’ 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 Managers 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, without the presence of Management, at least once a year. In FY 2023, the ARC met with the external auditors and internal auditors once 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. ANNUAL REPORT 2023 121
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