CapitaLand Investment Limited - Annual Report 2021

141 CapitaLand Investment Limited 140 Annual Report 2021 Our response: We assessed the Group’s processes for the selection of the external valuers, the determination of the scope of work of the valuers, and the review and acceptance of the valuations reported by the external valuers. We evaluated the qualifications and competence of the external valuers. We also read the terms of engagement of the valuers with the Group to determine whether there were any matters that might have affected their objectivity or limited the scope of their work. We considered the valuation methodologies used against those applied by other valuers for similar property types. We also considered other alternative valuation methods. We tested the integrity of inputs of the projected cash flows used in the valuations to supporting leases and other documents. We challenged the key assumptions used in the valuations, which included capitalisation, discount and terminal yield rates by comparing them against available industry data, taking into consideration comparability and market factors. Where the rates were outside the expected range, we undertook further procedures to understand the effect of additional factors and, when necessary, held further discussions with the valuers. We also considered the adequacy of the disclosures in the financial statements, in describing the inherent degree of subjectivity and key assumptions in the estimates. This includes the relationships between the key unobservable inputs and fair values, in conveying the uncertainties. Restructuring of the investment management business of CapitaLand Limited Group and the formation of the Group (Refer to Note 2 to the financial statements) Risk: In September 2021, the restructuring of CapitaLand Limited Group and the listing of the Group was completed by way of a scheme of arrangement pursuant to Section 210 of the Companies Act (the “Restructuring”). The Restructuring is a material non-routine transaction involving considerations around establishing common control in accordance with the accounting standards, applying merger accounting and related accounting policy choices as well as the approach to combining the entities involved in reflecting the restructuring transaction. Our response: We evaluated the appropriateness of management’s assessments and application of common control and merger accounting for the Restructuring by examining the scheme implementation agreement,legal and contractual documents against the criteria set out in the accounting standards and reviewing the consistency of accounting policy choices applied. We also assessed the Group’s approach undertaken and process in combining the entities involved in the Restructuring. Other information Management is responsible for the other information contained in the annual report. Other information is defined as all information in the annual report other than the financial statements and our auditors’ report thereon. We have obtained all other information prior to the date of this auditors’ report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of management and directors for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act, SFRS(I)s and IFRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The directors’ responsibilities include overseeing the Group’s financial reporting process. Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Independent Auditors’ Report TO THE MEMBERS OF CAPITALAND INVESTMENT LIMITED Independent Auditors’ Report TO THE MEMBERS OF CAPITALAND INVESTMENT LIMITED