Risk management is an integral part of Ascott Reit’s business at both the strategic and operational
level. A proactive approach towards risk management supports the attainment of the Group’s
business objective and corporate strategy, thereby creating and preserving value.
The Manager recognises that risk management is about opportunities as much as it is about threats.
Therefore, risk management is not about pursuing risk minimisation as a goal but rather optimising
the risk-reward relationship, within known and agreed risk appetite levels. The Manager therefore
takes risks in a prudent manner for justifiable business reasons.
The Board of Directors of the Manager (Board) is responsible for the governance of risk across Ascott
Reit. The responsibilities include determining Ascott Reit’s risk appetite, overseeing Ascott Reit’s
Enterprise Risk Management (ERM) Framework, regularly reviewing Ascott Reit’s risk profile, material
risks and mitigation strategies, and ensuring the effectiveness of risk management policies and
procedures. For these purposes, it is assisted by the Audit Committee (AC), which provides
dedicated oversight of risk management at the Board level.
The AC currently comprises three independent board members and meets on a quarterly basis. The
meetings are regularly attended by the CEO as well as other key management staff.
The Board has approved Ascott Reit’s risk appetite which determines the nature and extent of
material risks which Ascott Reit is willing to take to achieve its strategic objectives. The Ascott Reit’s
Risk Appetite Statement (RAS) is expressed via formal high-level and overarching statements.
Having considered key stakeholders’ interests, the RAS sets out explicit, forward-looking views of
Ascott Reit’s desired risk profile and is aligned to Ascott Reit’s strategy and business plans.
ENTERPRISE RISK MANAGEMENT FRAMEWORK
ERM Framework
Risk Strategy
Board Oversight & Senior Management Involvement
Internal Control System
Independent Review & Audit
Risk
Identification
& Assessment
Risk Monitoring
& Reporting
Risk
Response
• Key Risk Indicators
Risk-Aware Culture
• Accept
• Avoid
• Mitigate
• Transfer
• Risk Appetite
• Risk & Control
Self-Assessment
• Investment Risk Evaluation
• Whistle-blowing/
Business Malpractice
Ascott Reit’s ERM Framework sets out the required environmental and organisational components
which enable Ascott Reit to manage risks in an integrated, systematic and consistent manner. The
ERM Framework and related risk management policies are reviewed annually and are periodically
validated by external ERM consultants.
Enterprise Risk Management
46 | Ascott Residence Trust Annual Report 2014
