C O R P O R A T E G O V E R N A N C E
Principle 12:
Audit Committee
The AC is appointed by the Board from among the Directors of the Board, all of whom (including the Chairman of the AC) are
independent Directors. The members of the AC are Mr Henry Tan Song Kok (Chairman), Mr Teo Eng Cheong, Mr Teo Choon Chye,
Marc and Mr Chan Pengee, Adrian.
The Board is of the view that the members of the AC are appropriately qualified to discharge their responsibilities. Mr Henry Tan,
Mr Teo Eng Cheong and Mr Teo Choon Chye, Marc have extensive accounting and financial management expertise and experience,
and Mr Chan is a qualified lawyer with considerable experience and expertise.
The core functions of the AC comprise oversight of the integrity of the financial statements and related disclosures, oversight,
assessment and review of internal controls, review of the internal and external auditors’ findings on internal controls, making
recommendations to the Board on the appointment, re-appointment of the external auditor and the remuneration of the external
auditor. The AC also reviews the quality and reliability of information prepared for inclusion in financial reports. The AC is responsible
for the nomination of external auditors and reviewing the adequacy of existing audits in respect of cost, scope and performance.
The duties and responsibilities of the AC are set out in the AC’s written Terms of Reference and include among others, reviewing
(i) the audit plan and audit reports of external auditors, (ii) the quarterly and annual financial statements before submission to the
Board for approval, interested person transactions (“IPTs”) including compliance with relevant regulations, (iii) the internal audit
plan, (iv) key enterprise-wide risks faced by A-REIT to facilitate the management of such risks, (v) the policy and arrangements
by which staff of the Manager and any other persons may, in confidence, raise concerns about possible improprieties in matters
of financial reporting or other matters and (vi) any suspected fraud or irregularity, or suspected infringement of any Singapore
legislation, rules or regulations, which has or is likely to have a material impact on A-REIT’s operating results or financial position.
For the year under review, the AC has conducted a review of all non-audit services provided by the external auditors and is satisfied
that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors. The AC has
also met with the external and internal auditors without the presence of the Management. The aggregate amount of the audit
fees paid and payable by A-REIT and its subsidiaries to the external auditors for FY2014/2015 was $486,720, of which audit and
non-audit fees amounted to $361,780 and $124,940 respectively. In appointing the audit firm for A-REIT, the AC is satisfied that
A-REIT has complied with the requirements of Rules 712 and 715 of the Listing Manual of the SGX-ST.
AC meetings are generally held after the end of every quarter before the official announcement of results in relation to that quarter.
External Audit
KPMG LLP (“KPMG”) was re-appointed as the external auditor for A-REIT for FY2014/2015. The AC has assessed the performance
of the external auditor based on factors such as the performance and quality of their audit and the independence of KPMG and
the AC is of the view that KPMG is suitable to continue being appointed as external auditors of A-REIT.
Principle 13:
Internal Audit
The internal audit function is outsourced to BDO LLP (“BDO”), an international auditing firm. Staffed by qualified executives, BDO
has unrestricted access to the AC. BDO reports to the Chairman of the AC and is guided by the Standards for the Professional
Practice of Internal Auditing. These standards cover attributes as well as performance and implementation standards.
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