48
Ascott Residence Trust
Annual Report 2015
Enterprise Risk Management
Enterprise Risk Management Framework
• Accept
• Avoid
• Mitigate
• Transfer
• Key Risk Indicators
• Quarterly Compliance
Checklist
• Portfolio Monitoring
of Financial Risk
ERM Framework
Risk Strategy
Board Oversight & Senior Management Involvement
Internal Control System
Risk-Aware Culture
• Risk Appetite
• Risk & Control
Self-Assessment
• Investment Risk Evaluation
• Scenario Analysis
• Whistle-blowing/
Business Malpractice
Risk Identification
& Assessment
Risk
Response
Risk Monitoring
& Reporting
Independent Review and Audit
Risk management is an integral part of Ascott Reit’s
business at both the strategic and operational levels.
A proactive approach towards risk management
supports the attainment of Ascott Reit’s business
objective and corporate strategy, thereby creating and
preserving value.
The Manager of Ascott Reit (Manager) recognises that
risk management is just as much about opportunities
as it is about threats. To capitalise on opportunities, the
Manager has to take measured risks. 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
ef fectiveness of risk management policies and
procedures. For these purposes, it is assisted by the
Audit Committee (AC) which provides oversight of risk
management.
The AC currently comprises three independent
board members and meets on a quarterly basis.
The meetings are attended by the Chief Executive
Officer (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 the Manager is willing to take to achieve
Ascott Reit’s strategic and business objectives. The
Ascott Reit’s Risk Appetite Statement (RAS) which
addresses the management of material risks faced
by Ascott Reit, 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 with Ascott Reit’s strategy and
business plans.
