CORPORATE GOVERNANCE REPORT
(CONT’D)
The Board reviews the business risks of LMIR Trust, examines liability management and acts upon any comments from the
auditors of LMIR Trust. In assessing business risk, the Board considers the economic environment and risk relevant to the
property industry. The Board reviews management reports and feasibility studies on individual development projects prior
to approving major transactions. Management meets regularly to review the operations of the Manager and LMIR Trust
and to discuss any disclosure issues.
The Manager has put in place a system of internal controls of procedures and processes to safeguard LMIR Trust’s assets
and Unitholders’ interest, as well as to manage risks.
The internal audit function of the Manager is outsourced to KPMG Services Pte Ltd. The internal auditors report directly to
the ARC. The ARC is of the view that the internal auditors have adequate resources to perform their functions.
In the financial year under review, the internal auditors conducted audit reviews based on the internal audit plan approved
by the ARC and had unfettered access to all the documents, records, properties and personnel of the Manager, including
access to ARC. Upon completion of each audit assignment, the internal auditors report their findings and recommendations
to Management who would respond on the actions to be taken. The internal auditors submit quarterly internal audit reports
to the ARC for deliberation and also validate the follow up actions taken by management on the audit findings.
For the financial year under review, the CEO and the Chief Financial Officer (“CFO”) of the Manager have provided assurance
to the Board that the financial records of LMIR Trust have been properly maintained and the financial statements give a true
and fair view of the operations and finances and that the risk management and internal control system which has been put
in place is effective in addressing the material risks faced by LMIR Trust in its current business environment.
Based on the internal controls established and maintained, reviews performed by internal and external auditors, reviews
performed by Management and the ARC, and assurance from the CEO and the CFO of the Manager, the Board with the
concurrence of the ARC, is of the opinion that LMIR Trust Group’s internal controls, addressing financial, operational,
compliance and information technology risks, were adequate and effective as at 31 December 2015.
The Board notes that the systemof risk management and internal controls provides reasonable, but not absolute, assurance,
that LMIR Trust Group, will not be adversely affected by any event that could be reasonably foreseen or anticipated, 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 judgement in decision making,
human error, losses, fraud or other irregularities.
COMMUNICATION WITH UNITHOLDERS AND INVESTORS
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 Listing Manual requires that a listed entity discloses to the market matters that would be likely to have a material effect
on the price of the entity’s securities. The Manager strives to uphold a strong culture of timely disclosure and transparent
communication with the LMIR Trust Unitholders and the investing community.
LIPPO MALLS INDONESIA RETAIL TRUST
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