Page 118 - ar2014

ASCENDAS REAL ESTATE INVESTMENT TRUST 114
CORPORATE GOVERNANCE
The Manager advocates a performance-based remuneration system for key executive ofcers of the Manager. The system is fexible, responsive
to the market and based on individual employee’s performance. The remuneration structure is designed to retain, reward and motivate the
individual to stay competitive and relevant.
Remuneration of key executive ofcers of the Manager is reviewed and approved by the NHRRC and the parent entities of the Manager.
The total remuneration mix for each of the key executive ofcers comprises an annual salary and annual performance bonus. The fxed
annual salary includes a basic salary plus fxed allowances. The performance bonus is tied to the individual employee’s performance and the
performance of A-REIT which includes measures such as net property income, distributable income, cost of capital, portfolio occupancy,
investment, customers and investors’ satisfaction survey results and operational efciency of the Manager. This allows the Manager to align
the key executives’ remuneration with the long term goals of A-REIT.
No compensation is payable to any Director, senior management or staf of the Manager in the form of options in units or pursuant to any bonus
or proft-sharing plan or any other proft-linked agreement or arrangement, under the service contracts.
ACCOUNTABILITY AND AUDIT
Accountability
Principle 10: Presentation of a balanced and understandable assessment of performance, position and prospects
The Board is responsible for presenting a balanced and comprehensive assessment of A-REIT’s performance, position and prospects, including
interim and other price sensitive public reports and reports to the regulators (if required). To assist the Board in this regard, Management
provides timely, complete, adequate information to the Board through the most expedient means, including emails.
Financial reports and other price sensitive information are disseminated to Unitholders through announcements via SGXnet, press releases,
the A-REIT website and media and analyst briefngs.
RISK MANAGEMENT AND INTERNAL CONTROLS
Principle 11: A sound system of risk management and internal controls to safeguard shareholder’ investments and A-REIT’s assets
Risk Management
The Board recognises its responsibility for the governance of risks and has set in place procedures for ensuring a sound system of risk
management and internal controls. These procedures include having a structured Enterprise Risk Management (“ERM”) programme for A-REIT
and its subsidiaries (“Group”), Management and Board reviews of key transactions, and the assistance of independent consultants such as the
Group’s external and internal auditors to review fnancial statements and internal controls covering key risk areas.
The AC reviews and guides Management in the formulation of risk policies and processes to efectively identify, evaluate and manage any
material risk and ensure that a robust risk management and internal control system is maintained.
In addition, the Operational Risk Management Committee (“ORMC”) was set up in September 2012 to assist both the AC and the Board
on matters relating to the operational aspects of risk management. The main duties of the ORMC are (i) overseeing the adequacy and
efectiveness of the operational aspects of risk management; (ii) monitoring the efectiveness of the Group and its out-sourced Property
Manager’s risk management system to ensure that a sound and robust risk management system is maintained; (iii) evaluating the adequacy
of the efectiveness of the Group’s disclosure controls and procedures; and (iv) assessing the materiality of specifc events, developments and
risks to the Group and the impact on the unit price of A-REIT.