CORPORATE GOVERNANCE
The internal control systems include the safeguarding of assets, the maintenance of proper accounting records, the reliability of
financial information, compliance with appropriate legislation, regulations and best practice, and the management of business
risks. Such systems are designed to manage rather than to eliminate the risk of failure to achieve business objectives and provide
only reasonable, and not absolute, assurance against material misstatement or loss. The Board also notes that all internal control
systems contain inherent limitations and no system of internal controls can provide absolute assurance against the occurrence
of material errors, poor judgment in decision-making, human error losses, fraud or other irregularities.
The Board has also received assurance from the CEO and the Head, Reporting, Compliance and Corporate Services of the
Manager that:
(i)
The financial records have been properly maintained and the financial statements give a true and fair view of AREIT’s
operations and finances; and
(ii)
The system of risk management and internal controls to address material financial, operational, compliance and
information technology risks is adequate and remains effective.
Based on the system of risk management and internal controls established and maintained by the Manager, work performed
by the internal and external auditors, reviews performed by Management, various Board Committees and the Board, and the
assurance from the CEO and the Head, Reporting, Compliance and Corporate Services, the Board concurs with the AC and
are of the opinion that the system of risk management and internal controls addressing financial, operational, compliance and
information technology risks of A-REIT and its subsidiaries were adequate and effective as at 31 March 2016 in addressing
material risks.
Principle 12:
Audit Committee
The Board appoints the AC from among the Directors of the Board, the majority of whom (including the Chairman of the AC) are
independent Directors. The members of the AC are Mr Chan Pengee, Adrian (Chairman), Mr Teo Eng Cheong, Mr Teo Choon
Chye, Marc and Mr Wong Yew Meng.
The Board is of the view that the members of the AC bring with them invaluable recent and relevant managerial and professional
expertise in accounting, financial management and legal expertise and experience and hence are appropriately qualified to
discharge their responsibilities. Mr Wong YewMeng, 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 and the responsibilities of the AC are set out in the AC’s written Terms of Reference and 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 AC also reviews the quarterly and
annual financial statements before submission to the Board for approval, including the interested person transactions (“IPTs”).
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 FY2015/2016 was S$581,225, of
which audit and non-audit fees amounted to S$430,350 and S$150,875 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.
AC meetings are generally held after the end of every quarter before the official announcement of results in relation to that quarter.
The AC members are kept updated whenever there are changes to the accounting standards or issues that may have an impact
on the financial statements of A-REIT.
.105
A-REIT ANNUAL REPORT
2015/2016
