Page 62 - ar2012

CDL Hospitality TrustS
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The AC has established an internal controls system to ensure that all Related Party Transactions and/or
Interested Party Transactions will be undertaken on normal commercial terms and will not be prejudicial to the
interests of H-REIT and the holders of H-REIT units.
The AC held four meetings during the year and carried out its duties as set out within its terms of reference.
The Company Secretary maintains records of all AC meetings including records of discussions on key
deliberations and decisions taken. The AC meets with the internal and external auditors, each separately
without the presence of Management, annually.
In performing its duties, the AC also took guidance from the Guidebook for Audit Committees in Singapore issued
by the Audit Committee Guidance Committee in October 2008 (“ACGC Guidebook”). For the fnancial year under
review, the AC conducted a self-assessment of its efectiveness in the discharge of its duties and responsibilities.
The assessment was facilitated through the use of a self-assessment checklist (“AC Self-Assessment Checklist”)
adapted from the self-assessment checklist for audit committees set out in the ACGC Guidebook.
The AC Self-Assessment Checklist covered the AC terms of reference, composition, meetings, training
and resources, fnancial reporting, internal controls, internal and external audit processes, whistle-blowing,
relationships with the Board and communication with Security Holders.
Based on the self-assessment, the AC agreed that continuing development and improvement of the AC
efectiveness is an ongoing process and that the AC has fulflled its responsibilities and discharged its duties
as set out in its terms of reference.
External Auditors
The AC evaluated the quality of work performed by external auditors in FY 2012 based on the “Guidance to
Audit Committees on Evaluation of Quality of Work Performed by External Auditors” issued by The Accounting
and Corporate Regulatory Authority (“ACRA”) and Singapore Exchange Limited on 15 July 2010.
Taking cognizance that the external auditors should be free from any business or other relationships
with the H-REIT Group and the Stapled Group that could materially interfere with their ability to act with
integrity and objectivity, the AC undertook a review of the independence of KPMG LLP (“KPMG”) and gave
careful consideration to the H-REIT Group’s and the Stapled Group’s relationships with them during 2012.
In determining the independence of KPMG, the AC considered the nature of the provision of the non-audit
services in 2012 and the corresponding fees and was of the opinion that such non-audit services and fees did
not impair or threaten the audit independence. Based on the review, the AC is of the opinion that KPMG is, and
is perceived to be, independent for the purpose of the H-REIT Group’s and the Stapled Group’s statutory audit.
For details of the fees paid and/or payable by the H-REIT Group and the Stapled Group in respect of audit and
non-audit services for FY 2012, please refer to note 16 of the Notes to the Financial Statements.
In reviewing the nomination of KPMG for re-appointment for the fnancial year ending 31 December 2013, the
AC had considered the following:
(i) the adequacy and experience of the supervisory and professional staf of KPMG assigned to the audit
of the H-REIT Group and the Stapled Group;
(ii) the audit engagement partner assigned to the audit;
(iii) KPMG’s past experience in auditing clients in the REIT sector; and
(iv) the size and complexity of the audit exercise for the H-REIT Group and the Stapled Group.
KPMG have confrmed that they are registered with ACRA in accordance with Rule 712(2) of the Listing Manual.
The Stapled Group is thus in compliance with Rules 712 and 715 (read with Rule 716) of the Listing Manual in
relation to the appointment of its auditors.
On the basis of the above, the AC has recommended to the Board the nomination of KPMG for re-appointment
as external auditors of the H-REIT Group and the Stapled Group at the 2013 annual general meetings.
Corporate Governance