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Ascott Residence Trust
Annual Report 2015
Overview
Sustainability
Business
Review
Portfolio
Details
Corporate
Governance &
Transparency
Financials &
Additional
Information
The Manager adopts an Enterprise Risk Management (ERM) Framework which sets out the required environmental
and organisational components for managing risk in an integrated, systematic and consistent manner. The ERM
Framework and related policies are reviewed annually.
The Manager consistently seeks to improve and strengthen Ascott Reit Group’s ERM Framework. As part of
the ERM Framework, the Manager, among other things, undertakes and performs a Risk and Control Self-
Assessment (RCSA) process. As a result of the RCSA process, the Manager produces and maintains a risk
register which identifies the material risks Ascott Reit Group faces and the corresponding internal controls it has
in place to manage or mitigate those risks. The material risks are reviewed annually by the AC and the Board.
The AC also reviews the approach of identifying and assessing risks and internal controls in the risk register. The
system of risk management and internal controls is reviewed and, where appropriate, refined regularly by the
Manager, the AC and the Board. Where relevant, reference is made to the best practices and guidance in the
Risk Governance Guidance for Listed Boards issued by the Corporate Governance Council.
The Manager has established an approach on how risk appetite is defined, monitored and reviewed for Ascott
Reit Group. Approved by the Board, Ascott Reit Group’s RAS addresses the management of material risks
faced by Ascott Reit Group. Alignment of Ascott Reit Group’s risk profile to the RAS is achieved through various
communication and monitoring mechanisms put in place across the various functions within the Manager.
More information on Ascott Reit Group’s ERM Framework can be found in the Enterprise Risk Management
section on pages 48 to 50 of this Annual Report.
Internal and external auditors conduct audits that involve testing the effectiveness of the material internal controls
for Ascott Reit Group addressing financial, operational, compliance and information technology risks. This includes
testing, where practical, material internal controls in areas managed by external service providers. Any material
non-compliance or lapses in internal controls together with corrective measures recommended by the internal and
external auditors are reported to and reviewed by the AC. The adequacy and effectiveness of the measures taken
by the Manager in response to the recommendations made by the internal and external auditors are also reviewed
by the AC.
The Board has received assurance from the CEO and the Vice President, Finance (VP Finance) of the Manager that:
(a) the financial records for Ascott Reit Group have been properly maintained and the financial statements for the
year ended 31 December 2015 give a true and fair view of Ascott Reit Group’s operations and finances; and
(b) the system of risk management and internal controls in place for Ascott Reit Group is adequate and effective in
addressing the material risks faced by Ascott Reit Group in its current business environment including material
financial, operational, compliance and information technology risks. The CEO and VP Finance of the Manager
have obtained similar assurance from the respective risk and control owners.
In addition, in FY 2015, the Board has received quarterly certification by Management on the integrity of financial
reporting and the Board has provided a negative assurance confirmation to Unitholders as required by the Listing
Manual.
Based on the ERM Framework established and the reviews conducted by Management and both the internal and
external auditors, as well as the assurance from the CEO and VP Finance of the Manager, the Board concurs
with the recommendation of the AC and is of the opinion, that the system of risk management and internal
controls addressing material financial, operational, compliance and information technology risks established
by the Manager is adequate and effective to meet the needs of Ascott Reit Group in its current business
environment as at 31 December 2015.
