Sustainability
Corporate Governance
the year, the Audit Committee and the Board, with the
assistance of the internal and external auditors, has
reviewed the adequacy and effectiveness of Starhill Global
REIT’s system of risk management and internal controls
that address material risks, including material financial,
operational, compliance and information technology risks.
No significant weaknesses were noted from the auditors’
respective scope of reviews. The findings were discussed,
followed up and where appropriate, rectifications were
made by Management.
The Board has also received assurance from the Chief
Executive Officer and Chief Financial Officer of the
Manager that:
(a) The financial records of Starhill Global REIT have been
properly maintained and the consolidated financial
statements give a true and fair view of Starhill Global
REIT’s operations and finances; and
(b) Starhill Global REIT’s system of risk management
and internal controls in place within the Group
were adequate and effective as at 30 June 2015 in
addressing the material risks in the Group, including
material financial, operational, compliance and
information technology risks.
Based on the system of risk management and internal
controls established and maintained by the Manager, work
performed by the internal and external auditors, reviews
performed by Management, and the assurance from the
Chief Executive Officer and Chief Financial Officer of the
Manager, the Board with the concurrence of the Audit
Committee is of the opinion that Starhill Global REIT’s
system of risk management and internal controls in place
within the Group were adequate and effective as at
30 June 2015 in addressing the material risks in the Group,
including material financial, operational, compliance
and information technology risks. The Chief Executive
Officer and the Chief Financial Officer of the Manager
have obtained similar assurances from the function heads
of the Manager.
The Board notes that the system of risk management and
internal controls provides reasonable, but not absolute,
assurance that Starhill Global REIT 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 risk
management and internal controls can provide absolute
assurance against the occurrence of material errors, poor
judgment in decision making, human error, losses, fraud
or other irregularities.
Audit Committee
Principle 12:
The Board should establish an Audit Committee with
written terms of reference which clearly set out its
authority and duties.
will not prejudice the independence and objectivity of
the external auditors. The aggregate amount of fees paid
and payable to the external auditors for FY 2014/15 and
the breakdown into audit fees and non-audit fees are
set out on page 115. Pursuant to Rule 1207(6)(c) of the
listing manual of the SGX-ST, the Manager confirms that
Starhill Global REIT has complied with Rules 712 and 715
of the listing manual in relation to the appointment of the
external auditors.
The Audit Committee has reviewed the procedures in
place to ensure that employees of the Manager and
any other persons are provided with well-defined and
accessible channels to report on potential or actual
improprieties in financial or other operational matters,
in confidence, and for the independent investigation of
any reports by employees and any other persons and
appropriate follow up action. Reports may be made to
the compliance officer and to the chairman of the Audit
Committee via email at
The Audit Committee generally meets at least once
every quarter.
Internal Audit
Principle 13:
The company should establish an effective internal audit
function that is adequately resourced and independent of
the activities it audits.
The Audit Committee has appointed PricewaterhouseCoopers
LLP to perform the internal audit functions. The internal
auditor subscribes to, and is guided by the Standards for the
Professional Practice of Internal Auditing developed by the
Institute of Internal Auditors, Inc (“IIA”) and has incorporated
these standards into its audit practices and meets with the
standards set by the IIA. To ensure that the internal audits
are performed effectively, the internal auditor recruits
and employs suitably qualified professional staff with the
requisite skill sets and experience. The Audit Committee has
reviewed the adequacy and effectiveness of the internal
audit function and was satisfied that the internal audit
function was adequately resourced and has appropriate
standing within Starhill Global REIT and the Manager.
The internal auditor provides risk assessment services and
controls assurance in order to ensure internal controls are
aligned to business objectives and address related risks,
and reports directly to the Audit Committee. Management
is responsible for addressing issues identified by the
internal auditor. The internal auditor will also audit
and report on the appropriateness and effectiveness
of processes for the management of Related Party
Transactions twice a year. In addition, the Trustee also
has a right to review the internal audit reports so as to
ascertain that the Property Funds Appendix has been
complied with. The internal auditor has unrestricted
The Audit Committee is established by the Board from
amongst the Directors of the Manager and currently
comprises three members, all of whom are independent
non-executive Directors. The members of the Audit
Committee are Mr Keith Tay Ah Kee (Chairman),
Dr Hong Hai and Mr Michael Hwang. The members of
the Audit Committee, collectively, have relevant
accounting and financial management expertise or
experience and are qualified to discharge the Audit
Committee’s responsibilities.
The Audit Committee assists the Board in overseeing
the risk management framework and any matters of
significance affecting financial reporting and internal
controls of Starhill Global REIT. The terms of reference
for the Audit Committee include:
1.
reviewing audit reports to ensure that where
deficiencies in internal controls have been identified,
appropriate and prompt remedial action is taken by
Management;
2. monitoring the procedures in place to ensure
compliance with applicable legislation, the listing
manual of the SGX-ST and the Property Funds
Appendix;
3. reviewing and making recommendations to the
Board in relation to the financial statements and the
audit report;
4. monitoring the procedures established to regulate
Related Party Transactions (as defined below),
including ensuring compliance with the provisions of
the relevant regulations;
5. making recommendations to the Board on the
appointment, reappointment and removal of the
external auditors, and approving the remuneration
and terms of engagement of such auditors; and
6. ensuring that the internal audit function is adequately
resourced through outsourcing the appointment
to a reputable accounting firm where appropriate
and approving their appointment, removal and
remuneration.
The Audit Committee is responsible for the nomination of
external auditors and internal auditors, and reviewing the
adequacy and effectiveness of existing audits in respect
of cost, scope and performance. The Audit Committee
meets with the internal and external auditors at least
once a year without the presence of Management, to
discuss any matters which the Audit Committee or the
auditors believe should be discussed privately without the
presence of Management.
The Audit Committee is authorised to investigate any
matters within its terms of reference. It has unfettered
access to and cooperation from Management and
to reasonable resources to enable it to discharge its
functions. The Audit Committee has also reviewed all
non-audit services provided by the external auditors and
is satisfied that the nature and extent of such services
access to the Audit Committee, and access to the
Manager’s and Starhill Global REIT’s documents, records,
properties and personnel, where relevant to their work.
(D) UNITHOLDER RIGHTS AND
RESPONSIBILITIES
Principle 14:
Companies should treat all shareholders fairly and
equitably, and should recognise, protect and facilitate the
exercise of shareholders’ rights, and continually review
and update such governance arrangements.
Principle 15:
Companies should actively engage their shareholders
and put in place an investor relations policy to promote
regular, effective and fair communication with
shareholders.
Principle 16:
Companies should encourage greater shareholder
participation at general meetings of shareholders, and
allow shareholders the opportunity to communicate their
views on various matters affecting the company.
The Manager upholds a strong culture of continuous
disclosure and transparent communication with
Unitholders and the investing community. The Manager
has in place a dedicated team performing the investor
relations function and has developed a communications
policy, the cornerstone of which is delivery of timely
and full disclosure of all material information relating
to Starhill Global REIT by way of announcements via
SGXNET in the first instance and then including the
announcements on Starhill Global REIT’s website
at
More details on the
Manager’s investor relations activities and efforts
are set out on page 67.
Starhill Global REIT’s website contains recent
announcements, press releases, presentations, and past
and current reports to Unitholders. The website also
provides visitors with the option of signing up for a free
email alert service on public materials released by the
Manager in relation to Starhill Global REIT.
The Manager also participates in investor conferences
locally and overseas as part of its efforts to cultivate and
maintain regular contact with investors and analysts
and to build interest in and strengthen the branding of
Starhill Global REIT.
All Unitholders are sent a copy of the Starhill Global REIT
Annual Report prior to an Annual General Meeting. As and
when an Extraordinary General Meeting of the Unitholders
is to be held, each Unitholder is sent a copy of a circular
to Unitholders which contains details of the matters to
be proposed for Unitholders’ consideration and approval.
77
76
STARHILL
GLOBAL
REIT
Annual
Report
FY 2014/15
