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CDL
HOSPITALITY TRUSTS
Based on the internal controls framework established, the independent annual review
conducted by KPMG Services Pte. Ltd. of H-REIT and HBT’s governance and internal controls
framework and the assurance from Management, the H-REIT Manager Board and HBT Trustee-
Manager Board confirm, with the assistance of the AC and the RMC, that they have reviewed the
adequacy and effectiveness of H-REIT and HBT’s risk management system and internal controls
that address the financial, operational, compliance and information technology controls and
concur with the opinion of the AC and the RMC that the risk management system and system
of internal controls in place as at 31 December 2014 are adequate and effective to address in all
material respects the financial, operational, compliance and information technology risks within
the current scope of H-REIT and HBT’s business operations.
Principle 12: Audit Committee
Composition of the AC
The AC of both the H-REIT Manager and the HBT Trustee-Manager comprises three NEDs, all
of whom (including the chairman of the Audit Committee) are independent.
The chairman of the AC and all the remaining members of the AC have audit, accounting or
finance background and experience. The H-REIT Manager Board and the HBT Trustee-Manager
are of the view that the AC has sufficient financial management expertise and experience
amongst its members to discharge the functions of the AC within its written terms of reference
approved and adopted by the respective Boards.
Powers and Duties of the AC
The AC is authorised by the H-REIT Manager Board and the HBT Trustee-Manager Board to
investigate any matters it deems appropriate within its written terms of reference and has direct
and unrestricted access to the external auditors and the internal auditors. It may invite any
Director, Management, officer or employee of the H-REIT Manager and/or the HBT Trustee-
Manager to attend its meetings. It is also authorised to engage any firm of accountants, lawyers
or other professionals as it sees fit to provide independent counsel and advice to assist in the
review or investigation on such matters within its terms of reference as it deems appropriate at
the expense of the H-REIT Manager and the HBT Trustee-Manager.
The principal responsibility of the AC is to assist the H-REIT Manager Board and the HBT
Trustee-Manager Board in maintaining a high standard of corporate governance, particularly by
providing an independent review of the effectiveness of H-REIT’s and HBT’s financial reporting
process (including reviewing the accounting policies and practices of the H-REIT Group, the
HBT Group and the Stapled Group on a consolidated basis) and key internal controls, including
financial, operational, compliance and information technology controls. Other duties within its
written terms of reference include:
•
to review significant financial reporting issues and judgements so as to ensure the integrity
of the financial statements of H-REIT Group, HBT Group and CDLHT to be reported to the
Stapled Securities Holders, and any other formal announcements relating to the financial
performance of the H-REIT Group, HBT Group and the Stapled Group.
• to review and report to the Board annually on the adequacy and effectiveness of the
H-REIT’s and HBT’s internal controls, including financial, operational, compliance and
information technology controls (which review may be carried out internally or with the
assistance of competent third parties).
•
to coordinate with the RMC to monitor in particular the identification, evaluation,
management and monitoring of the risks related to financial reporting;
CORPORATE GOVERNANCE
