EC World REIT - Annual Report 2016

EC World Real Estate Investment Trust ANNUAL REPORT 2016

Accountability

Principle 10:

The Board should present a balanced and understandable assessment of the company’s performance, position and

prospects

The Manager provides Unitholders with quarterly and annual financial statements. In presenting the annual and quarterly

financial statements to Unitholders, the Board aims to provide Unitholders with a balanced, clear and understandable

assessment of ECW’s performance, position and prospects. In order to achieve this, Management provides the Board

with management accounts on a monthly basis and such explanation and information as any Director may require, to

enable the Directors to keep abreast, and make a balanced and informed assessment, of ECW’s financial performance,

position and prospects.

The Manager believes in conducting itself in ways that seek to deliver maximum sustainable value to Unitholders. Best

practices are promoted as a means to build an excellent business for Unitholders and the Manager is accountable to

Unitholders for ECW’s performance. Prompt fulfilment of statutory and regulatory reporting requirements is but one

way to maintain Unitholders’ confidence and trust in the capability and integrity of the Manager.

Risk Management and Internal Controls

Principle 11:

A sound system of risk management and internal controls to safeguard shareholders’ interests and the company’s assets

The Manager has put in place an adequate and effective system of internal controls addressing material financial,

operational, compliance and information technology risks to safeguard Unitholders’ interests and ECW’s assets.

The Board has overall responsibility for the governance of risk and oversees the Manager in the design, implementation

and monitoring of the risk management and internal controls systems. The ARC assists the Board in carrying out the

Board’s responsibility of overseeing the risk management framework and policies of ECW Group.

The ARC is guided by its terms of reference, in particular, the ARC:

(a) reviews ECW’s risks profile and level of risk tolerance;

(b) assesses the adequacy and effectiveness of the risk management and internal controls systems established by the

Manager to manage risks;

management framework, policies and strategies for managing risks that are consistent with ECW Group’s risk

appetite and reports to the Board on its decisions on any material matters concerning the aforementioned;

(d) makes the necessary recommendations to the Board such that an opinion relating to the adequacy and

effectiveness of the risk management and internal controls system can be made by the Board in the annual report

of ECW in accordance with the Listing Manual and the Code; and

(e) considers and advises on risk matters referred to it by Management or the Board including reviewing and reporting

to the Board on any material breaches of the Risk Appetite Statement (“RAS”), any material non-compliance with

the approved framework and policies and the adequacy of any proposed action.