Notes to the Financial Statements For the financial year ended 31 December 2024 15 SIGNIFICANT RELATED PARTY TRANSACTIONS For the purposes of these financial statements, parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Key management personnel compensation None of the key management personnel received any compensation from the Company during the year. The compensation of key management personnel (including directors of the Company) is compensated by a related corporation. Other related party transactions In addition to the related party information disclosed elsewhere in the financial statements, these are the following significant transactions which were carried out in the normal course of business on terms agreed between the parties during the financial year: 2024 2023 $ $ Related corporation Management fee expenses 2,421,318 2,032,798 16 FINANCIAL RISK MANAGEMENT Overview Exposure to market risk (including interest rate and equity price), credit risk and liquidity risk arises in the normal course of the Company’s business. The Company’s approach to financial risk management seeks to minimise the potential material adverse effects from these exposures. Risk management framework The Company adopts the risk management policies and guidelines of its immediate holding company, which has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. Risk management policies and guidelines are reviewed regularly to reflect changes in market conditions and the Company’s activities. (a) Market risk Market risk is the risk that changes in the market prices such as interest rates and equity price will have on the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. (i) Interest rate risk The Company’s exposure to market risk for changes in interest rates relates primarily to its interestbearing loan from a related corporation. The Company’s policy on interest rate management follows that of its immediate holding company. CapitaLand Investment Limited manages the interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. It actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. 301 Annual Report 2024
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