no material weaknesses in the risk management and internal control systems were identified by the ARCC and the Board. The Board notes that the risk management and internal control systems established by the Manager provide reasonable assurance that the Group will not be significantly affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. The Board also notes that no risk management and internal control systems can provide absolute assurance in this regard, or against poor judgement in decision-making, human error, losses, fraud or other irregularities. Principle 10: Audit Committee The ARCC comprises 3 independent non-executive Directors. They are: 1. Mr. Nagaraj Sivaram, Independent Non-Executive Director (Chairman) 2. Ms. Stefanie Yuen Thio, Independent Non-Executive Director (Member) 3. Mr. Loi Pok Yen, Independent NonExecutive Director (Member) The ARCC members bring with them invaluable experience and professional expertise in the accounting, legal, financial management and real estate areas. Mr. Nagaraj Sivaram is a qualified chartered accountant with many years of experience in audit and assurance. Ms. Stefanie Yuen Thio is an Advocate and Solicitor of The Supreme Court of Singapore and her areas of expertise include mergers and acquisitions, equity capital markets, corporate transactions and regulatory advice. Mr. Loi Pok Yen has extensive experience in the logistics sector in Singapore as well as overseas. The separation of the roles of the Chairperson of the Board and the Chairman of the ARCC ensures greater independence of the ARCC in the discharge of its duties. None of the ARCC members are former partners or directors of ESR-REIT’s existing audit firm or auditing corporation (a) within a period of two years commencing on the date of their ceasing to be a partner of the audit firm or director of the auditing corporation and (b) for as long as they have any financial interest in the auditing firm or auditing corporation. The ARCC has explicit authority to investigate any matter within its terms of reference. It has full access to, and the co-operation of, the Management and full discretion to invite any Director or staff to attend its meetings. The ARCC also has adequate resources, including access to external consultants, internal and external auditors, to enable it to discharge its responsibilities properly. The ARCC meets with the internal and external auditors,without the presence of Management, at least once a year. Role of ARCC The ARCC is guided by its written terms of reference with principal functions as follows: • reviewing significant financial reporting issues and judgements to ensure the integrity of the financial statements of ESR-REIT and any announcements relating to ESR-REIT’s financial performance; • reporting to the Board on the significant issues and judgements that the ARCC considered in relation to the financial statements, and how these issues were addressed; • overseeing and reviewing the adequacy and effectiveness of ESRREIT’s risk management function and internal control systems; • assisting the Board in reviewing at least annually the adequacy and effectiveness of the Manager’s and ESR-REIT’s risk management and internal control systems (including financial, operational, compliance, environmental and IT controls); • reviewing the assurance from the CEO and the CFO on the financial records and financial statements; • reviewing the adequacy, effectiveness, independence, scope and results of the Manager’s internal audit function; • reviewing the adequacy, effectiveness, independence, scope and results of the external audit, and the independence and objectivity of the external auditors; • reviewing and recommending to the Board on the appointment, reappointment and removal, remuneration and terms of engagement of the internal and external auditors; • ensuring both the Manager and ESRREIT are compliant with all applicable legal and regulatory provisions and requirements (including codes, notices and guidelines) in relation to matters within its purview; • reviewing and ensuring that the Manager has programmes and policies in place to identify and prevent fraud or other possible improprieties and for such matters to be safely raised, independently investigated and appropriately followed up on; • overseeing and monitoring whistleblowing protocols; • ensuring that the Manager has in place a sound system for the identification, valuation, approval and reporting of Interested Person Transactions (“IPTs”) and Related Party Transactions (“RPTs”); and • reviewing all IPTs and RPTs to ensure they are on normal commercial terms, and that they do not prejudice the interests of ESR-REIT and the minority Unitholders of ESR-REIT. 107 ESR-REIT ANNUAL REPORT 2025
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