CORPORATE GOVERNANCE
Internal Controls
The Group-wide system of internal controls, which includes a code of conduct, documented policies and procedures, proper
segregation of duties, approval procedures and authorities, as well as checks-and-balances built into the business processes,
constitute an important part of the ERM system.
The Manager has in place, a control self-assessment program whereby process owners will self-assess their respective internal
controls via self-assessment questionnaires on an annual basis. Action plans are then drawn up to mitigate the control gaps. The
self-assessment exercise is subsequently validated by A-REIT’s internal auditors.
The AC is assisted by internal and external auditors to assess and to ensure that key internal controls and risk management
processes are adequate and effective.
The internal and external auditors will report any material non-compliance or weaknesses in internal controls or recommendations
to further improve the internal controls to the AC. The AC will also follow up on the actions taken by the Management on the
recommendations made by the internal and external auditors. Based on the reports submitted by the internal and external
auditors received by the AC and the Board, nothing material has come to the attention of the AC and the Board to cause the
AC and the Board to believe that the internal controls and risk management processes are not satisfactory.
The Manager has documented procedures that cover financial reporting, new investments, project appraisal, valuation
of properties, equity, fund raising, borrowings through banks, compliance and other risk management issues, as well as
comprehensive insurance coverage and a business continuity plan.
The Manager recognises that there is a significant amount of risk inherent in making property investment decisions and carefully
examines whether the anticipated return on investment is appropriate having regard to the level of risk of the investment.
Accordingly, the Manager has set out procedures to be followed when making such decisions and ensures that comprehensive
due diligence is carried out in relation to each proposed investment.
In assessing business risks, the Board also considers the economic environment and property industry risks. The Board, at times
by the Investment Committee, reviews and approves all investment decisions. The Management meets regularly to review the
operations of the Group.
The Manager has a Whistleblowing Policy which reflects the Manager’s commitment to conduct its business within a framework
that fosters the highest ethical and legal standards. The Whistleblowing Policy aims to provide an avenue to raise concerns
about possible improprieties in matters of financial reporting or other matters. The AC is kept informed of all concerns raised
in whistleblowing channels.
Directors’ Opinion On Internal Controls
The CEO and the Head, Reporting, Compliance and Corporate Services have provided their confirmation to the Board that
to the best of their knowledge, based on outcomes of on-going reviews on risk management and internal controls, and in the
absence of contradictory evidence, the system of risk management and internal controls is adequate and effective, financial
records have been properly maintained and the financial statements give a true and fair view of A-REIT’s operations and finances.
The Board recognises the importance of sound internal controls and risk management practices for good corporate governance.
The Board affirms their overall responsibility for systems of internal controls, including financial, operational, compliance and
information technology controls, and risk management of A-REIT, and for reviewing the adequacy and integrity of those systems
on an annual basis. The internal control and risk management functions are performed by key executive officers of the Manager
with oversight by the AC.
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A-REIT ANNUAL REPORT
2015/2016
