Corporate Governance In order to encourage the alignment of the interests of the non-executive Directors with the interests of shareholders, a non-executive Director is required to hold shares in the Company worth at least one year of the basic retainer fee for a Director or the total number of shares awarded under the above policy, whichever is lower, at all times during his or her Board tenure. For the Chairman, the shares are required to be held for at least two years from the date of award, and the two-year moratorium shall continue to apply in the event of retirement. Other than this, the non-executive Directors do not receive any other share incentives under any of the Company’s share plans. The cash component of Directors’ fees for FY 2024 was paid half-yearly in arrears. The share component of Directors’ fees for FY 2024 was paid as soon as practicable after 1 January 2025. The Company will be seeking shareholders’ approval at the upcoming 2025 AGM for the remuneration to be paid to the non-executive Directors for FY 2025. Compensation Risk Assessment Under the Practice Guidance, the compensation system shall take into account the compensation risk assessment and policies of the Group, be symmetric with risk outcomes and sensitive to the time horizon of risks. The ERCC is satisfied that there are adequate risk mitigation features in the Group’s compensation system, but will continue to undertake periodic reviews of compensation-related risks. ACCOUNTABILITY AND AUDIT Principle 9: Risk Management and Internal Controls The Company maintains adequate and effective systems of risk management and internal controls (including financial, operational, compliance and information technology (IT) controls) to safeguard stakeholders’ interests and the Group’s assets. The Board has overall responsibility for the governance of risk, including determining the risk strategy, risk appetite and risk limits, as well as the risk policies. The Board has established the RC to assist it in carrying out the Board’s responsibility of overseeing the Company’s risk management framework and policies for the Group, determining the nature and extent of the significant risks which the Company is willing to take in achieving its strategic objectives and value creation and ensuring that Management maintains a sound system of risk management and internal controls. Under its terms of reference, the RC’s scope of duties and responsibilities include the following: (a) make recommendations to the Board on risk strategy, risk appetite and risk limits; (b) review the risk management framework, including the processes and resources to identify, assess and manage key risks, including emerging risks faced by the Group, and a risk dashboard to monitor the Group’s risk profile on a regular basis; (c) oversee Management in the design, implementation and monitoring of risk management and internal controls systems, and monitoring the alignment of the risk framework to the Group’s growth strategy, supporting a culture of risk taking within approved risk appetite; (d) review the key risks including emerging risks faced by the Group as well as the maintenance of a sound system of risk management and internal controls for the Group; (e) review the adequacy and effectiveness of the risk management and internal controls systems covering key risks; (f) monitor the Group’s risk profile and risk mitigation measures by Management, including Management’s responsiveness to any significant findings and recommendations as well as identify areas for improvement, where necessary; and (g) consider and advise on risk matters referred to it by the Board or Management. All RC members are non-executive Directors, with a majority of whom (including the RC Chairman) are independent Directors. In FY 2024, the RC met two times. The Company recognises that it is a good risk governance practice to ensure awareness among the members of the AC and the RC of the respective risk-related activities of both committees, given the interconnectivity of risks. In this regard, the Company has put in place the following arrangements to facilitate sharing of information and knowledge, and to foster a common understanding of the risk management and internal controls systems, between the AC and the RC: (a) an annual joint meeting between the AC and the RC; (b) updates to be provided by the AC Chairman and the RC Chairman at the beginning of each Board meeting to allow the AC and the RC to provide context for their respective reporting to the Board; and 68 CapitaLand Investment Limited (c) common membership between the AC and the RC– as at 14 March 2025, two members of the AC (namely Tan Sri Abdul Farid Alias and Mr Gabriel Lim Meng Liang) also served as members of the RC. The Group adopts an Enterprise Risk Management (ERM) framework which sets out the required environmental and organisational components for managing risks in an integrated, systematic and consistent manner. The ERM framework and related policies are reviewed annually. A team comprising the Group CEO and other KMP, including the newly appointed Chief Risk Officer (as of 1 January 2025), is responsible for directing and monitoring the development, implementation and practice of ERM across the Group. As part of the ERM framework, Management, among other things, undertakes and performs a Group-wide Risk and Control Self-Assessment annually to identify material risks along with their mitigating measures. The adequacy and effectiveness of the systems of risk management and internal controls are reviewed at least annually by Management, the RC, the AC and the Board, taking into account the Listing Manual and the best practices and guidance in the Risk Governance Guidance for Listed Boards issued by the Corporate Governance Council. The Group’s Risk Appetite Statement (RAS), which incorporates the Group’s risk limits, addresses the management of material risks faced by the Group. Alignment of the Group’s risk profile to the RAS is achieved through various communication and monitoring mechanisms (including key performance indicators set for Management) put in place across the Group. More information on the Group’s ERM framework, including the material risks identified, can be found in the Risk Management section on pages 45 to 49 of this Annual Report. The internal and external auditors conduct reviews of the adequacy and effectiveness of the material internal controls (including financial, operational, compliance (including with sanctions-related laws and regulations) and IT controls) and risk management systems. This includes testing, where practicable, material internal controls in areas managed by external service providers. Any material non-compliance or lapses in internal controls together with corrective measures recommended by the internal and external auditors are reported to and reviewed by the AC. The AC also reviews the adequacy and effectiveness of the measures taken by Management on the recommendations made by the internal and external auditors in this respect. The Board has received assurance from the Group CEO and the Group CFO that the financial records of the Group have been properly maintained and the financial statements for FY 2024 give a true and fair view of the Group’s operations and finances. It has also received assurance from the Group CEO and the relevant KMP who have responsibility regarding various aspects of risk management and internal controls that the systems of risk management and internal controls within the Group are adequate and effective in addressing the risks (including financial, operational, compliance (including sanctions-related risks) and IT risks) which the Company considers relevant and material to its current business environment. The Group CEO, the Group CFO and the other KMP have obtained similar assurances from the respective business and corporate executive heads in the Group. In addition, for FY 2024, the Board received the relevant certification by Management on the integrity of financial reporting and the Board provided a negative assurance confirmation to shareholders 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 Group CEO, the Group CFO and the relevant KMP, the Board is of the opinion that the systems of risk management and internal controls within the Group are adequate and effective to address the risks (including financial, operational, compliance (including sanctions-related risks) and IT risks) which the Company considers relevant and material to its current business environment as at 31 December 2024. The AC and the RC concur with the Board in its opinion. No material weaknesses in the systems of risk management and internal controls were identified by the Board, the AC or the RC in the review for FY 2024. The Board notes that the systems of risk management and internal controls established by Management provide reasonable assurance that the Group, 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 Board also notes 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 Committee All AC members are non-executive Directors, with a majority of whom (including the AC Chairman) are independent Directors. The AC members bring invaluable managerial and professional expertise in accounting and related financial management domains. In particular, the majority of the AC members have recent and relevant professional qualifications relating to accounting or finance, experience working within corporate finance, financial reporting or accounting, and/or hold or have held executive responsibilities for a sizeable business including the finance function. 69 Annual Report 2024
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