82 CapitaLand Ascott Trust within CLAS are adequate and effective to address the risks (including financial, operational, compliance, IT and sanctions-related risks) that the Managers consider relevant and material to the current business environment. The CEO, the CFO and the relevant KMP of the Managers have obtained similar assurances from the respective risk and control owners. In addition, for FY 2025, the Boards received half-yearly certification by Management on the integrity of financial reporting and the Boards provided a negative assurance confirmation to Stapled Securityholders as required by the Listing Manual. Based on the ERM Framework established and the reviews conducted by Management and both the internal and external auditors, as well as the assurance from the CEO and the CFO, the Boards are of the opinion that the systems of risk management and internal controls (including financial, operational, compliance, IT and sanctionsrelated controls) are adequate and effective to address the risks (including financial, operational, compliance, IT and sanctions-related risks) which CLAS considers relevant and material to its current business environment as at 31 December 2025. The ARC concurs with the Boards in their opinion. 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 2025. 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 The ARC comprises three non-executive Directors, all of whom (including the ARC chairman) are IDs. They bring recent and relevant managerial and professional expertise or experience in accounting, auditing and related financial management domains. The ARC does not comprise former partners of the external auditors, Deloitte & Touche LLP (Deloitte) (a) within a period of two years commencing from the date of their ceasing to be partners of Deloitte; or (b) who have any financial interest in Deloitte. The ARC has explicit authority to investigate matters within its terms of reference. Management gives the fullest co-operation in providing information and resources to the ARC, and carrying out its requests. The ARC has direct access to the internal and external auditors and 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 Corporate Governance
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