CORPORATE GOVERNANCE REPORT
104
ANNUAL REPORT 2015
FRASERS HOSPITALITY TRUST
of such key risks and presented to the Board and the ARC Committee. Risk tolerance statements setting out the nature
and extent of significant risks which the REIT Manager is willing to take in achieving its strategic objectives have been
formalised and adopted.
The Board has received assurance from the CEO and the CFO of the Managers that as at 30 September 2015:
(a)
the financial records of FHT have been properly maintained and the financial statements for the financial period
ended 30 September 2015 give a true and fair view of FHT’s operations and finances;
(b)
the system of internal controls in place for FHT is adequate and effective as at 30 September 2015 to address
financial, operational, compliance and information technology risks which the Managers consider relevant and
material to FHT’s operations; and
(c)
the risk management system in place for FHT is adequate and effective as at 30 September 2015 to address risks
which the Managers consider relevant and material to FHT’s operations.
Opinion of the Board on Internal Controls and Risk Management Framework
Based on the internal controls established and maintained by the Managers, reviews performed by internal and external
auditors, reviews performed by Management and the ARC Committee, and assurance from the CEO and CFO of
the Managers, the Board, with the concurrence of the ARC Committee, is of the opinion that the internal controls in
place for FHT, were adequate and effective as at 30 September 2015 to address financial, operational, compliance and
information technology risks, which the Managers consider relevant and material to FHT’s operations.
Based on the risk management framework established and assurance from the CEO and the CFO of the Managers, the
Board is of the view that the risk management system in place for FHT was adequate and effective as at 30 September
2015 to address risks which the Managers consider relevant and material to FHT’s operations.
The Board notes that the system of internal controls and risk management provides reasonable, but not absolute,
assurance that the FHT will not be adversely affected by any event that could be reasonably foreseen as it works to
achieve its business objectives.
In this regard, the Board also notes that no system of internal controls and risk management can provide absolute
assurance against the occurrence of material errors, poor judgment in decision making, human error, losses, fraud or
other irregularities.
Principle 12:
Audit Committee
Based on its written terms of reference, the ARC Committee is to monitor and evaluate the effectiveness of the REIT
Manager’s internal controls, review the quality and reliability of information prepared for inclusion in financial reports,
and will be responsible for the nomination of external auditors and reviewing the adequacy of external audits in respect
of cost, scope and performance. It is authorised to investigate any matter in relation thereto whenever it deems
necessary.
The ARC Committee has full access to, and has the full cooperation of, Management, with full authority and discretion
to invite any Director or employee of the Manager to attend its meetings. The ARC Committee is able to call upon the
Manager’s resources to enable it to discharge its functions effectively.
The ARC Committee’s responsibilities include:
•
reviewing the significant financial reporting issues and judgments so as to ensure the integrity of the financial
statements of FH-REIT and any formal announcements relating to FH-REIT’s financial performance;
•
reviewing and monitoring the effectiveness of the Manager’s internal controls, including financial, compliance
and risk management controls and procedures and reporting findings thereon to the Board at least annually;
•
reviewing the adequacy and effectiveness of the internal audit function, including its resources, audit plans and
the scope and effectiveness of the internal audit procedures;
•
reviewing, on an annual basis, the independence and objectivity of the external auditors and where the external
auditors also provide a substantial volume of non-audit services to FH-REIT, keeping the nature and extent of
such services under review, seeking to balance the maintenance of objectivity and value for money; and
•
making recommendations to the REIT Manager Board on the appointment, reappointment and removal of
external auditors and approving the remuneration and terms of engagement of external auditors.
