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Annual Report 2015
To enable the RMCs to discharge their responsibilities satisfactorily, each RMC was authorised by
their respective Board to (i) seek any information that it required from any officer or employee of
the Managers, all of whom the RMCs have been granted full access to and who are directed to co-
operate with; (ii) exercise full discretion to invite any other Director, Management, representatives
from the Managers’ or H-REIT and HBT’s risk, compliance and/or internal audit functions (as may
be applicable), representatives from the external auditors, specific risk owners or any officer or
employee of the H-REIT Manager, the HBT Trustee-Manager and their subsidiaries or any external
professional advisers to attend its meetings; and (iii) engaged any firm of accountants, lawyers or
other professionals as the RMCs saw fit to provide independent counsel and advice or to assist in
any review of matters within the RMC’s terms of reference as the RMCs deem appropriate, at the
Managers’ or H-REIT and HBT’s expense.
Internal Controls
Having regard to the risks to which the business is exposed, the likelihood of such risks occurring
and the costs of mitigating such risks, H-REIT and HBT’s internal controls structure have been
designed and put in place by Management to provide reasonable assurance against material
financial misstatements or loss, for the safeguarding of assets, for the maintenance of proper
accounting records, for the provision of financial and other information with integrity, reliability
and relevance, and in compliance with applicable laws and regulations. However, no internal
controls system can provide absolute assurance in view of inherent limitations of any internal
controls system against the occurrence of human and system errors, poor judgement in decision-
making, losses, fraud or other irregularities. H-REIT and HBT’s internal controls structure includes:
-
an external audit programme;
-
an internal audit programme;
-
a risk management framework established for the identification, assessment, measurement
and monitoring of its key risks;
-
the establishment and review from time to time of policies and procedures which govern and
allow for the monitoring of financial, operational, compliance and information technology
controls; and
-
a whistle blowing programme.
The Board has received assurance from the Management on both the H-REIT Group and HBT
Group’s financial records and the effectiveness and adequacy of the risk management and internal
controls structure. Each Board also receives a separate quarterly representation on the financial
information and controls, that nothing has come to Management’s attention which may render
the financial statements to be false or misleading in any material respect.
Based on the internal controls framework established, the independent annual review and
quarterly regulatory and compliance reviews conducted by KPMG Services Pte. Ltd. of H-REIT
and HBT’s governance and internal controls framework and the written assurance from the
CEO and CFO, the H-REIT Manager Board and HBT Trustee-Manager Board confirm, with the
assistance of the AC and the RMCs, 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 ARC that the risk management system and system of internal controls in place as at
31 December 2015 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 and that the financial records have been properly maintained and the
financial statements give a true and fair view of the operations and finances of H-REIT and HBT.
CORPORATE GOVERNANCE
Guideline 11.3
(a) In relation to the
major risks faced by the
Company, including financial,
operational, compliance,
information technology and
sustainability, please state
the bases for the Board’s
view on the adequacy
and effectiveness of the
Company’s internal controls
and risk management
systems.
Please refer to paragraph
under the heading "Internal
Controls".
(b) In respect of the past
12 months, has the Board
received assurance from the
CEO and the CFO that: (i)
the financial records have
been properly maintained
and the financial statements
give a true and fair view of
the Company’s operations
and finances; and (ii) the
Company’s risk management
and internal control systems
are effective? If not, how
does the Board assure itself
of points (i) and (ii) above?
Please refer to the
third paragraph under
the heading "Internal
Controls".
