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
– 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
– 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