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Ascott Residence Trust
Annual Report 2015
Corporate Governance
The Board notes that the system of risk management and internal controls established by the Manager
provides reasonable, but not absolute, assurance that Ascott Reit Group, as it strives to achieve its business
objectives, will not be significantly affected by any event that can be reasonably foreseen or anticipated. The
Board notes that no system of risk management and internal controls can provide absolute assurance in this
regard, or absolute assurance against poor judgement in decision making, human error, losses, fraud or other
irregularities.
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 IDs. 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. The 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 Ascott Reit Group and any announcements relating to Ascott Reit Group’s financial performance;
(b) reviews and reports to the Board at least annually the adequacy and effectiveness of the Manager’s internal controls,
including financial, operational, compliance and information technology controls, and risk management systems;
(c) reviews the effectiveness of the Manager’s internal audit and compliance functions;
(d) reviews the scope and results of the external audit and independence and objectivity of the external auditors;
(e) makes recommendations to the Board on the proposals to Unitholders on the appointment, reappointment and
removal of the external auditors, and approving the remuneration of the external auditors;
(f) reviews and approves processes to regulate transactions involving an Interested Person (as defined in Chapter
9 of the Listing Manual) and/or Interested Party (as defined in the Property Funds Appendix) (each, an Interested
Person) and Ascott Reit and/or its subsidiaries (Interested Person Transactions), to ensure compliance with the
applicable regulations, in particular, the requirements that the transactions are on normal commercial terms and
are not prejudicial to the interests of Ascott Reit and its minority Unitholders; and
(g) reviews the policy and arrangements by which employees of the Manager 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.
