166 CapitaLand Integrated Commercial Trust Notes to the financial statements Year ended 31 December 2024 28 RELATED PARTIES For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the parties or exercise significant influence over the parties in making financial and operating decisions, or vice versa, or where the Group and the parties are subject to common significant influence. Related parties may be individuals or other entities. The Manager, CapitaLand Retail Management Pte Ltd, CapitaLand Commercial Management Pte. Ltd. and CapitaLand Development Pte. Ltd. are related companies of a substantial Unitholder of the Trust. In the normal course of the operations, management fees and trustee’s fees have been paid or are payable to the Manager and respective trustee. The property management fees and property management reimbursements are payable to CapitaLand Retail Management Pte Ltd and CapitaLand Commercial Management Pte. Ltd. During the financial year, other than those disclosed elsewhere in the financial statements, the following were significant related party transactions carried out in the normal course of business: Group 2024 2023 $’000 $’000 Asset enhancement works and consultancy fees paid/payable to related companies of the Manager 4,195 400 Leasing and other expenses paid/payable to related companies of the Manager 33,174 22,682 Rental and other income received/receivable from related companies of the Manager 47,658 38,890 Divestment fees paid/payable to the Manager 3,440 – 29 FINANCIAL RISK MANAGEMENT Capital management The board of directors of the Manager (“the Board”) proactively reviews the Group’s and the Trust’s capital and debt management and financing policy regularly so as to optimise the Group’s and the Trust’s funding structure. Capital consists of Unitholders’ funds of the Group. The Board also monitors the Group’s and the Trust’s exposure to various risk elements and externally imposed requirements by closely adhering to clearly established management policies and procedures. The Trust is subject to the aggregate leverage limit as defined in the Property Funds Appendix of the CIS code. With effect from 28 November 2024, the CIS Code stipulates that the total borrowings and deferred payments (the “Aggregate Leverage”) of a property fund should not exceed 50.0% of the fund’s Deposited Property and the property fund should have a minimum interest coverage ratio of 1.5 times. Prior to 28 November 2024, the Aggregate Leverage limit is 45.0% with the exception that the Aggregate Leverage limit may exceed 45.0% of the fund’s deposited property (up to a maximum of 50.0%) only if the property fund has a minimum adjusted interest coverage ratio of 2.5 times after taking into account the interest payment obligations arising from the new borrowings. During the year, the Trust is in compliance with the Aggregate Leverage limit and minimum interest coverage ratio thresholds. There were no changes in the Group’s and the Trust’s approach to capital management during the financial year.
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