Principle 4 - Safeguard Integrity in Corporate Reporting

Related key governance documents:

4.1 Board Audit Committee

To ensure the accurate presentation of each Trust’s financial position, DXFM has in place a structure of review and authorisation, where the Board Audit Committee reviews (among other matters):

  • Financial statements of each entity
  • Independence and competence of the external auditor
  • Semi-annual management representations to the Committee, affirming the veracity of each entity’s Financial Statements
  • Treasury and Tax related matters such as funding strategies, distribution payout ratio, periodic market guidance and tax risk policy

The Board Audit Committee’s Terms of Reference require that all members are Non-Executive Directors with financial expertise and an understanding of the industry in which Dexus operates.

The Board Audit Committee:

  • Has access to management
  • Has unrestricted access to external auditors without management present
  • Has the opportunity to seek explanations and additional information as it sees fit
  • May also obtain independent professional advice in the satisfaction of its duties at the cost of the Group and independent of management

The Board Audit Committee meets as frequently as required to undertake its role effectively, but not less than four times a year, and the external auditor (PwC) is invited to attend all meetings. The Board also requests that the external auditor of DXFM and its related trusts and entities, attends the Annual General Meeting of the Group and is available to answer questions relating to the audit of the Group’s financial statements, preparation and content of the auditor’s report, the accounting policies adopted by the Group and auditor independence.

From 1 July to 31 December 2016, the members of the Board Audit Committee were:

  • Peter St George, Chair, Non-Executive Director
  • Richard Sheppard, Non-Executive Director
  • Elizabeth Alexander AM, Non-Executive Director
  • Tonianne Dwyer, Non-Executive Director

From 1 January 2017, Mark Ford joined as a member replacing Richard Sheppard and the Board Audit Committee now consists of the following members:

  • Peter St George, Chair, Non-Executive Director
  • Elizabeth Alexander AM, Non-Executive Director
  • Tonianne Dwyer, Non-Executive Director
  • Mark Ford, Non-Executive Director

The qualifications and experience of each of the Board Audit Committee members can be found at www.dexus.com/board. All these directors are independent, including the Chair. During the Reporting Period, the Board Audit Committee met four times and all members attended all meetings of the Board Audit Committee.

The following are provided to the Board Audit Committee as required:

  • Representations from the Chief Executive Officer and the Chief Financial Officer on a semi-annual basis on the veracity, maintenance and compliance with laws of the Financial Statements and effectiveness of the financial risk management systems
  • A fraud risk questionnaire completed by the Group Risk Committee semi-annually to advise of any instances of actual or perceived fraud during the period

The Board Audit Committee Terms of Reference is available at www.dexus.com/boardcommittees

To ensure the independence of the statutory auditor, the Committee has responsibility for approving the engagement of the auditor for any non-audit service greater than $100,000. At 30 June 2017, fees paid to the external auditor for non-audit services were 2.6% of audit fees.

Dexus’s policy on the selection and appointment of the external auditor is outlined in the Auditor Independence Policy available at www.dexus.com/boardpolicies

During 2017, the Board Audit Committee also focused on:

  • Valuation of investment properties, including those investment properties accounted for under the equity method
  • Valuation of indefinite life intangible assets
  • Investment property transfers to inventory
  • Capital management and derivative valuations
  • Financial risks and controls environment