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RISK
MANAGEMENT
The Manager has put in place
an enterprise risk management
framework for Starhill Global REIT,
comprising procedures and protocol
to identify and initiate mitigation of
enterprise risks which may arise in
the management and operations
of Starhill Global REIT, particularly
in the areas of asset acquisitions,
asset integration, financial risk
management, and workplace safety
and health. To address each of these
areas, the Manager has adopted
policies and/or hired or designated
staff with specific expertise in that
area, and continues to assess the
potential impact of risks which may
arise and the necessary response
or process to effectively mitigate
those risks.
ASSET ACQUISITION PROCESS
Prior to any new acquisition, each
of the key risks attributable to the
acquisition or the subsequent
management of the asset is assessed.
Functional heads in the Manager
are responsible for this process. The
Board is made aware of all key risks
considered and that these have been
addressed or mitigated appropriately.
ASSET INTEGRATION PROCESS
Following every successful acquisition,
it is imperative that each asset
is quickly integrated into Starhill
Global REIT’s existing portfolio,
from financial, operational and
compliance perspectives. This process
is activated before the closing of each
acquisition, and completed as soon
as practicable thereafter.
WORKPLACE SAFETY AND HEALTH
The Manager complies in all material
respects with the Singapore’s
Workplace Safety and Health Act.
We have also put in place appropriate
fire safety practices for the Singapore
assets of Starhill Global REIT. For more
information on workplace health and
safety, please refer to page 70 of this
Annual Report.
FINANCIAL RISK MANAGEMENT
POLICY
Starhill Global REIT’s returns are
primarily from net operating
income and capital appreciation
of its assets. However, these returns
are exposed to financial risks
including credit, liquidity, interest
rates and foreign currency risks.
Where appropriate, the Manager
may hedge against the volatility
of interest rates, foreign currency
net income and foreign currency
investments. Starhill Global REIT
has a system of controls in place
to create an acceptable balance
between the cost of the financial
risks occurring and the cost of
managing these risks.
The Manager continuously
monitors the Group’s financial risk
management process to ensure that
an appropriate balance between risk
and control is achieved. Financial risk
management policies and systems
are reviewed regularly to reflect
changes in market conditions and
Starhill Global REIT’s activities.
The policies contain the parameters
and processes for managing these
risks, and define the roles and
responsibilities of those who manage
the process. For more information on
financial risk management, please
refer to pages 128 to 134 of this
Annual Report.
BUSINESS CONTINUITY PLANNING
The Manager has developed a
plan to address the impact and
recovery of unforeseen disruptions
or emergency circumstances to its
business and operations. Key areas
such as information technology,
finance, regulatory compliance,
vital record storage and recovery
are addressed, to ensure smooth
continuation of the Manager’s and
the Property Manager’s essential
business operations, in the event of
a major disruption or contingency.
OPERATIONAL RISK SELF
ASSESSMENTS (ORSA)
The Manager has an ORSA protocol
to ensure a regular review and
assessment of the internal processes
which have been implemented under
the enterprise risk management
framework. The Manager periodically
conducts ORSA to assess the key risks
and controls identified. This process
also ensures that adequate resources
are allocated to mitigate these risks.
RISK REPORTING
The Manager actively assesses and
manages legal and compliance risks
for Starhill Global REIT. Such risks may
arise in each of the various jurisdictions
Starhill Global REIT has assets located
in, with the application of different
laws and regulatory requirements,
the enforceability of counterparty
obligations and/or changes to
applicable laws and regulations.
Quarterly reports are made to the
Manager’s Audit Committee (on an
exceptions basis), and the Board is
regularly updated on all such matters.
WHISTLE BLOWING POLICY
The Board has established a whistle
blowing policy, pursuant to which
employees and any other persons may,
in confidence, raise concerns about
potential or actual improprieties in
financial or other operational matters,
so as to facilitate independent
investigations of such matters and
ensure that appropriate remedial
and follow-up action is taken.
On an ongoing basis, the whistle
blowing policy is covered during
staff orientation to promote
fraud awareness.
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STARHILL GLOBAL REIT ANNUAL REPORT FY 2016/17