full discretion to invite any Director or KMP to attend its meetings. Similarly, 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 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 internal audit and external audit, and the adequacy and effectiveness of the Managers’ internal audit function and the external auditors respectively; (e) making recommendations to the Boards on the proposals to Stapled Securityholders on the appointment, re-appointment and removal of the external auditors, and approving remuneration and terms 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 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 (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. The ARC reviewed the independence of the external auditors, considering the non-audit services provided, and is satisfied that the independence of the external auditors is not affected by the provision of such services. 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 2024 amounted to S$3,564,000. The external auditors did not provide any non-audit services in FY 2024. The ARC met five times in FY 2024. The ARC reviews CLAS’ half-yearly financial statements, including the relevance and consistency of accounting principles adopted and any significant financial reporting issues, and the quarterly business updates, which are approved by the Boards. In FY 2024, 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 meets internal and external auditors, separately and without Management’s presence at least once a year. In FY 2024, the ARC discussed the financial reporting process, internal controls and risk management systems, and significant comments and recommendations by the auditors at the meetings. Key Audit Matters In the review of the CLAS’ financial statements for FY 2024, the ARC discussed with Management the accounting principles applied and their judgement of items that might affect the integrity of the financial statements and also considered the clarity of key disclosures in the financial statements. The ARC reviewed, amongst other matters, the following key audit matter as reported by the external auditors for FY 2024. 83 Annual Report 2024
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