CORPORATE GOVERNANCE The IA function has a Quality Assurance and Improvement Programme (“QAIP”) in place to ensure that its audit activities conform to the IIA Standards. As part of the QAIP, internal Quality Assurance Reviews (“QAR”) are conducted at least once every three years, and an external QAR is carried out at least once every five years by qualified professionals from an external organisation. In 2023, Ernst & Young (“EY”) was appointed to conduct the external QAR. Based on EY’s assessment, the IA function has been rated to have conformed with the IIA Standards. Provision 10.5 The ARC held six meetings during the year and carried out its duties as set out within its terms of reference. The Company Secretaries maintain records of all ARC meetings including records of discussions on key deliberations and decisions taken. The ARC meets with the internal and external auditors, each separately without the presence of Management, at least once annually. In 2024, two of such private sessions were held with both internal and external auditors. The ARC members continually keep themselves abreast of changes to accounting standards, risks and other issues which may have a material impact on financial statements. For the financial year under review, the ARC conducted a self-assessment of its own effectiveness in the discharge of its roles and responsibilities, which was facilitated with a self-assessment checklist (“ARC Self-Assessment Checklist”). The ARC Self-Assessment Checklist covered, inter alia, the responsibilities of the ARC under its terms of reference and considered the contribution of the ARC members to the ARC’s deliberation and decision-making process. Based on the self-assessment, the ARC is of the view that it has fulfilled its responsibilities and discharged its duties as set out in its terms of reference. External Auditors (Provisions 10.1(d) and 10.1(e)) Cognisant that the external auditors should be free from any business or other relationships with the Group that could materially interfere with their ability to act with integrity and objectivity, the ARC undertook a review of the independence of KPMG and gave careful consideration to the Group’s relationships with them during 2024. In determining the independence of KPMG, the ARC reviewed all aspects of the Group’s relationships with them including the policies, processes and safeguards adopted by the Group and KPMG to protect and preserve audit independence. The ARC had considered the guidance from the International Ethics Standards Board for Accountants and adopted a Non-Assurance Services Pre-approval Policy to safeguard auditor independence. All non-prohibited nonassurance services require the approval of the ARC with the exception of non-prohibited pre-approved services below certain fee thresholds. The ARC also considered the nature and volume of the provision of the non-audit services by KPMG in 2024 and the corresponding fees and noted that the fees for nonaudit services had not exceeded 50% of the aggregate amount of all fees paid/payable to KPMG in 2024. Based on the review, the ARC is of the opinion that KPMG is, and is perceived to be, independent for the purpose of the Group’s statutory financial audit. Details of the fees paid and/or payable by the Group in respect of audit and non-audit services for FY 2024 are set out below: $’million Audit fees paid to: – auditors of the Company and other firms affiliated with KPMG International Limited 7.3 – other auditors 0.4 Non-audit fees paid to: – auditors of the Company and other firms affiliated with KPMG International Limited 2.4 – other auditors 0.1 In reviewing the nomination of KPMG for re-appointment for the financial year ending 31 December 2025, the ARC had considered the adequacy of the resources and experience of KPMG and the audit engagement partners assigned to the audit, the size and complexity of the audit engagement for the Group, and the number and experience of the supervisory and professional staff assigned to the Group’s audit through a review of the curriculum vitae of the KPMG audit team. The ARC also considered the quality of discussions with the findings raised by KPMG, including the Audit Quality Indicators presented. KPMG has confirmed that they are registered with Accounting and Corporate Regulatory Authority. The Company is thus in compliance with Rule 712 and Rule 715 (read with Rule 716) of the Listing Manual in relation to the appointment of its auditors. CORPORATE GOVERNANCE REPORT CITY DEVELOPMENTS LIMITED 24
RkJQdWJsaXNoZXIy ODIwNTc=