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Role and responsibilities of the Audit and Risk Committee

The objective of the Committee is to assist the Board in fulfilling its

corporate governance responsibilities by:

(a) monitoring and reviewing:

– the accuracy, integrity and reliability of financial reports and

statements of listed entities of the Group including the Trust;

– the effectiveness of the Group’s internal control environment

including the systems of internal controls, risk management and

legal compliance;

– the objectivity and effectiveness of the internal audit function; and

– the independence, objectivity and effectiveness of the external audit


(b) overseeing the processes for:

– identifying and managing significant risks faced by the Group;

– monitoring and reviewing the appropriateness of the Group's risk

management framework (a review of which was undertaken in the

financial year);

– the Group’s compliance with applicable laws and regulations;

– implementing appropriate and adequate control, monitoring and

reporting systems; and

– making recommendations to the Board in relation to the

appointment of the external auditors and approving the

remuneration and terms of their engagement.

The Audit and Risk Committee also has oversight of the Group’s

processes for identifying material exposure to economic, environmental

and social sustainability risks. The Group undertakes periodical reviews

of such risks. The Trust's investment is a 50% interest in Westfield

Carindale and, as such, it is exposed to the risks inherent in the

ownership of a single asset. Reference should also be had to section 1.4

of the Directors' Report.

Compliance officers have been appointed in Australia and New Zealand.

These officers are responsible for reviewing and monitoring the

efficacy of compliance systems within the Group on an ongoing basis

in order to ensure appropriate measures are in place to educate staff

on their compliance responsibilities and to report to the Audit and Risk

Committee on those matters.

The Audit and Risk Committee meets with external auditors at

least twice each year (and more frequently if required) to review the

adequacy of existing external audit arrangements and the scope of the

external audit. Both internal and external auditors have a direct line of

communication at any time to, either the Chairman of the Committee,

or the Chairman of the Board. The Audit and Risk Committee reports

to the Board after each Committee meeting and the minutes of each

Audit and Risk Committee meeting are provided to the Board. At least

annually, the Audit and Risk Committee meets with the internal auditor

and external auditors, without management being present.

Non–Audit Services Protocol

Scentre Group’s Non–Audit Services Protocol is designed to ensure that

the external auditor carries out the statutory audit function in a manner

which is, at all times, demonstrably independent of Scentre Group,

including the Trust.

The Protocol sets out the parameters under which the Group can

engage the external auditor to provide certain non–audit services in

order to safeguard the auditor’s objectivity or independence.

The Group recognises that a high quality, independent statutory audit

is fundamental to the maintenance of good corporate governance,

and to the proper functioning of the capital markets. The statutory

audit forms an integral part of the process of providing members with

clear, comprehensive and reliable financial information. The current

Protocol reflects the Group’s desire to preserve the independence of

the statutory audit process.

Under the terms of the Protocol, the lead audit partner (having primary

responsibility for the audit) and the audit partner responsible for

reviewing the audit must rotate every 5 years. A succession plan is

required to be presented by the external auditor to the Committee for

its approval, at least one year before the rotation is due to occur.

The Non–Audit Services Protocol also sets out key requirements in

the relationship between the external auditor and Scentre Group, and

defines the scope and value of the non–audit services which could be

provided by the external auditor to Scentre Group, without impacting on

the actual or perceived independence of the external auditor.

The Protocol requires an annual confirmation by the external auditor

regarding compliance with the terms of the Protocol and a number of

other matters which impact the actual and perceived independence

of the external auditor. The Protocol is monitored and reviewed in the

context of ongoing changes in the legal, accounting and governance

requirements applicable to the Group to ensure that it remains relevant

and consistent with the high standards of independence as well as

market and member expectations.

2.2 Executive Committee

In addition to the Audit and Risk Committee, the Board has delegated

specific risk related responsibilities to the Executive Committee which

includes the CEO, CFO, Chief Risk Officer and General Counsel as its


This Committee is responsible for:

(a) assisting in the formulation of all aspects of the risk management

process to be adopted by the Group including the Trust;

(b) overseeing the implementation by management of the Group’s

policies and procedures by ensuring that all phases of the process

of identification, assessment, control, review and reporting are

reflected appropriately in the policies, processes, performance

requirements and controls in the Group and the Trust;

(c) ensuring that there is a proper allocation of responsibility for the

implementation and conduct of the risk management process

between the Group’s management in Australia and New Zealand;


(d) implementing appropriate systems to monitor compliance with all

relevant laws and other regulatory obligations and for ensuring that

the risk management processes of the Group are such that the CEO

and the CFO are able to give the certifications required in order to

comply with the Corporations Act, applicable accounting standards

and the ASX Corporate Governance Council’s Corporate Governance

Principles and Recommendations.

The Chief Risk Officer reports to the Audit and Risk Committee on the

effectiveness of Scentre Group’s management of its material risks.

Corporate Governance Statement (continued)

34 / Carindale Property Trust

Annual Report 2015