CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 CORPORATE GOVERNANCE 50 51 CORPORATE GOVERNANCE 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 re l at i onsh i ps wi th them during 2021. In determining the independence of KPMG, the ARC reviewed all aspects of the Group’s relationships wi th them i nc l ud i ng the po l i c i es , processes and safeguards adopted by the Group and KPMG to protect and preserve audit independence. The ARC also considered the nature and volume of the provision of the non-audit services in 2021 and the corresponding fees and noted that the fees for non-audit services had not exceeded 50% of the aggregate amount of all fees paid/payable to KPMG in 2021. 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 2021 are set out below: $’million Audit fees paid to: - auditors of the Company 3.6 - other auditors 3.4 Non-audit fees paid to: - auditors of the Company 1.8 - other auditors 3.4 In reviewing the nomination of KPMG for re-appointment for the financial year ending 31 December 2022, 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 exercise 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 had also considered the quality of discussions with the findings raised by KPMG, including the Audit Quality Indicators presented. KPMG has conf i rmed that they are registered with ACRA. 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. On the basis of the above, the ARC has recommended to the Board the nomination of KPMG for re-appointment as external auditors at the 2022 AGM. Whistle-blowing Policy (Provision 10.1(f)) CDL has in place a whistle-blowing policy and procedure where employees of the Company can raise in confidence, whether anonymously or otherwise, concerns on possible improprieties relating to accounting, financial reporting, internal controls and auditing matters or other matters without fear of reprisals in any form. The ARC has the responsibility of overseeing this policy which is properly administered with the assistance of the Head of IA. Under these procedures, arrangements are in place for independent investigation of such matters raised and for appropriate follow-up action to be taken. The Company is committed tomaintaining procedures for the confidential submission of reports and the identity of the whistleblower concerned will not be disclosed if so requested by the whistle-blower who lodged the report. Investigations of such reports will be handled on a confidential basis to the extent permissible or deemed appropriate under the circumstances and involve persons who need to be involved in order to properly carry out the investigation and will, on a best efforts basis, be carried out in a timely manner. In order to facilitate and encourage the reporting of such matters, the whistleblowing policy, together with the dedicated whistle-blowing communication channels (email and postal address as well as toll-free telephone contact numbers in various countries) are available on the Company’s website and intranet and are easily accessible by all employees. Thewhistle-blowing policy and procedures are reviewed by the ARC from time to time to ensure that they remain current. For more information on the said policy and procedures, please refer to the Company’s website at www.cdl.com.sg. INTERESTED PERSON TRANSACTIONS The Company had obtained shareholders’ approval at its Annual General Meeting held on 30 April 2021 (“2021 AGM”) for the Company, its subsidiaries and its associated companies not listed on SGX-ST or an approved exchange, over which the Company, its subsidiaries and/or interested persons have control, to enter i nto t ransact i ons wi th i n the categories of Interested Person Transactions set out in the Company’s Let t e r to Sha reho l de r s da t ed 15 April 2021 (“Letter to Shareholders”), with such persons within the class or classes of Interested Persons as described in the Letter to Shareholders, provided that such transactions are entered into in accordance with the review procedures set out in the Letter to Shareholders (the “IPT Mandate”). The IPT Mandate is subject to annual renewal by the shareholders. Given that such Interested Person Transactions are expected to occur with some degree of frequency and may arise at any time, and to allow the Group to undertake such transactions in an expeditious manner, shareholders’ approval will be sought at the 2022 AGM for the renewal of the IPT Mandate. The ARC ha s con f i rmed t ha t an independent financial adviser’s opinion is not required for the renewal of the IPT Mandate as the methods or procedures for determining the transaction prices of the IPTs conducted under the IPT Mandate have remained appropriate s i nce shareho l der s approved the renewal of the IPT Mandate at the 2021 AGM, and the methods or procedures continue to be sufficient to ensure that these IPTs will be carried out on normal commerc ial terms and wi l l not be prejudicial to the interests of the Company and its minority shareholders. Particulars of interested person transactions required to be disclosed under Rule 907 of the Listing Manual are as follows: Name of Interested Person Nature of relationship Aggregate value of all interested person transactions in FY 2021 (excluding transactions less than $100,000 and transactions conducted under the IPT Mandate pursuant to Rule 920) $’000 Aggregate value of all interested person transactions conducted in FY 2021 under the IPT Mandate pursuant to Rule 920 (excluding transactions less than $100,000) $’000 Subsidiaries of Hong Leong Investment Holdings Pte. Ltd. Hong Leong Investment Holdings Pte. Ltd. is a controlling shareholder of the Company. Its subsidiaries are interested persons being associates of a controlling shareholder. Joint Venture Shareholders’ Loans Provision of corporate secretarial services to interested persons 10,804* 1,162 Property-related Transactions: (a) Provision of housekeeping services to interested persons; and (b) Lease of premises to interested persons Management and Support Services: Provision of management and consultancy services by interested persons 2,025 620 Directors and their immediate family members and relatives Nil Nil Note: * The figure comprises the aggregate value of shareholders’ loans extended to joint venture companies involving interested persons, and where applicable, interest accrued on shareholders’ loans, in FY 2021, which were announced on 25 February 2022 pursuant to Rule 916(3) of the Listing Manual. The shareholders’ loans referred herein have been extended by all the joint venture parties or shareholders in proportion to their respective equity interest in the joint venture and on the same terms and conditions, including the interest rate, if any, accrued or to be accrued on the shareholders’ loans. The above interested person transactions were carried out on normal commercial terms and were not prejudicial to the interests of the Company and its minority shareholders.
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