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CapitaLand Limited
Annual Report 2015
Corporate Governance Report
Audit Committee
Principle 12:
The Board should establish an Audit Committee with written terms of reference which clearly set out its
authority and duties.
All the members of the AC, including the Chairman of the AC, are non-executive independent Directors. The members bring with
them invaluable recent and relevant managerial and professional expertise in accounting and related financial management domains.
The AC has explicit authority to investigate any matter within its terms of reference. Management is required to provide the
fullest co-operation in providing information and resources, and in implementing or carrying out all requests made by the AC.
The AC has direct access to the internal and external auditors and full discretion to invite any Director or executive officer to
attend its meetings. Similarly, both the internal and external auditors are given unrestricted access to the AC.
The AC is guided by its terms of reference. In particular, the AC:
(a) reviews the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements
of the Company and any announcements relating to the Company’s financial performance;
(b) in conjunction with the assessment by the RC, assesses the adequacy and effectiveness of the internal controls
(including material financial, operational, compliance and information technology controls) and risk management system;
(c) reviews the effectiveness of the Company’s internal audit function;
(d) reviews the scope and results of the external audit, independence and objectivity of the external auditors;
(e) makes recommendations to the Board on the proposals to the shareholders relating to the appointment, re-appointment
and removal of the external auditors, and approving the remuneration of the external auditors;
(f) reviews and approves processes to regulate interested person transactions and to ensure compliance with the applicable
regulations, in particular, the requirement that the transactions are on normal commercial terms and are not prejudicial
to the interests of the Company and its minority shareholders; and
(g) reviews the policy and arrangements by which employees of the Company and any other persons may, in confidence,
report suspected fraud or irregularity or suspected infringement of any laws or regulations or rules, or raise concerns about
possible improprieties in matters of financial reporting or other matters, with a view to ensuring that arrangements are in
place for such concerns to be raised and independently investigated, and for appropriate follow-up action to be taken.
During FY 2015, the Company conducted a Request for Proposal for the appointment of auditors for financial year ending
31 December 2016 (FY 2016). The AC reviewed proposals from several reputable audit firms, including the incumbent auditors,
and made a recommendation to the Board that the incumbent auditors be nominated for re-appointment as the statutory
auditors of the Group for FY 2016 at the forthcoming AGM. In making this recommendation, the AC considered and was
satisfied with the independence and audit quality of the incumbent auditors. The Board has accepted the recommendation.
In order to maintain the independence of the external auditors, the Company has developed policies regarding the types
of non-audit services that the external auditors can provide to the Group and the related approval processes. The AC has
reviewed the nature and extent of non-audit services provided by the external auditors during FY 2015 and the fees paid for
such services. The AC is satisfied that the independence of the external auditors has not been impaired by the provision of
those services. The external auditors have also provided confirmation of their independence to the AC. The total audit and
non-audit fees for FY 2015 were S$6,962,000 and S$447,000, respectively.
In FY 2015, the AC also met with the internal and external auditors, without Management’s presence, to discuss the
reasonableness of the financial reporting process, the system of internal controls, and the significant comments and
recommendations by the auditors. Where relevant, the AC makes reference to the best practices and guidance in the
Guidebook for Audit Committee in Singapore and the practice directions issued from time to time in relation to Financial
Reporting Surveillance Programme administered by the Accounting and Corporate Regulatory Authority of Singapore.
Changes to accounting standards and accounting issues which have a direct impact on the financial statements were
reported to and discussed with the AC at its meetings. Directors are also invited to attend relevant seminars on changes to
accounting standards and issues by leading accounting firms
The Company confirms that it has complied with Rules 712, 715 and 716 of the Listing Manual.
