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REPORTS
The ARCs also considered the following in their review:
(i) the adequacy and experience of the supervisory and professional staff of KPMG
assigned to the audit of the H-REIT Group, HBT 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, HBT Group and
the Stapled Group.
KPMG have confirmed that they are registered with ACRA in accordance with Rule 712(2)
of the Listing Manual of SGX-ST. The Stapled Group is thus in compliance with Rules
712 and 715 (read with Rule 716) of the Listing Manual of SGX-ST in relation to the
appointment of its auditors.
On the basis of the above, the ARCs have recommended to the Board the nomination of
KPMG for re-appointment as external auditors of the H-REIT Group, HBT Group and the
Stapled Group at the 2017 Annual General Meetings ("
2017 AGMs
").
Whistle Blowing Policy
The H-REIT Manager and the HBT Trustee-Manager have in place a whistle blowing
policy setting out the procedure where staff of the H-REIT Manager and the HBT Trustee-
Manager and other persons can raise in confidence, whether anonymously or otherwise,
concerns on possible improprieties relating to accounting, financial reporting, internal
controls and auditing matters, without fear of reprisals in any form. The ARCs have
the responsibility of overseeing this policy which is administered with the assistance
of Management. Under these procedures, arrangements are in place for independent
investigation of such matters raised and for appropriate follow up action to be taken.
The H-REIT Manager and the HBT Trustee-Manager are committed to maintaining
procedures for the confidential and anonymous submission of reports and the anonymity of
whistle-blowers concerned will be maintained where so requested by the whistle-blowers
who lodged the report. Investigations into such reports will be handled on a confidential
basis to the extent permissible or deemed appropriate under the circumstances, and
involve persons who need to be involved in order to properly carry out the investigation
and will, on a best efforts basis, be carried out in a timely manner.
In order to facilitate and encourage the reporting of such matters, the whistleblowing
policy, including the dedicated whistle blowing email address at acchairman@cdlht.
com and postal correspondence channel are available on CDLHT’s website. The
whistle blowing policy and procedural arrangements are reviewed by the ARCs on an
annual basis.
Guideline 13.1
Does the Company have an internal
audit function? If not, please explain
why.
The H-REIT Manager outsourced
the internal audit function for
H-REIT’s operations to Millennium
& Copthorne International Limited,
a related corporation. Please refer
to the explanation under “Principle
13: Internal Audit”.
Principle 13: Internal Audit
Internal Audit ("
IA
") plays an important role in monitoring an effective system of internal
controls. The IA function of the Singapore hotels’ operations is performed by the internal
audit team of Millennium & Copthorne International Limited, a related corporation. A
summary of the internal auditors’ reports is extended to the ARCs, the CEO and the
CFO of the H-REIT Manager and HBT Trustee-Manager. The internal auditors have been
directed to meet or exceed the standards set by internationally recognised professional
bodies including the International Standards for the Professional Practice of Internal
Auditing set by The Institute of Internal Auditors.
The ARCs review the IA plan. Processes are in place such that material control weaknesses
raised in the IA reports are dealt with in a timely manner, with outstanding exceptions
or recommendations being closely monitored and reported back to the ARCs on a
quarterly basis.
The ARCs review the activities of the internal auditors on a quarterly basis and are satisfied
that the IA function is independent of the activities which it audits; is adequately resourced;
and has appropriate standing within the H-REIT Manager and HBT Trustee-Manager to
perform its role and responsibilities effectively. The ARCs met with the internal auditors
separately without the presence of Management in January 2017.
CORPORATE GOVERNANCE
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