CORPORATE GOVERNANCE SECTION 4 121 Al-`Aqar Healthcare REIT | Annual Report 2024 Employee Safety & Health The Human Resource Unit is in charge of the Safety & Health issues at the operating level to address and ensure compliance with Occupational Safety and Health policies and procedures, with a goal to facilitate the provision of a safe and healthy working environment for all employees and other related parties in compliance with the requirements of the Occupational Safety and Health Act 1994. The manager has established a mental health policy & procedure in providing a structural approach for identifying, supporting, and managing mental health issues among employees in the workplace. Mental health awareness training also was conducted on the 30th of May 2024 to trigger the employee’s awareness regarding their mental health. The Manager undertakes adequate insurance coverage on both its employees and assets to ensure both are sufficiently insured against any losses arising from various perils faced in the Manager’s/ REIT’s operations. (h) Outsourcing Functions to Third-Party Service Providers The Manager entered into a few outsourcing arrangements that involved entrusting specific tasks, functions, or processes to external partners or third-party service providers. The objectives of these arrangements are to leverage the benefit from the partner’s expertise, infrastructure, and economies of scale to improve cost efficiency to enable the organisation to focus more on core operations. To mitigate the risks that these arrangements have on the company’s performance, the Manager has set up the following controls: Fit & Proper • Developed an outsourcing policy in 2024 to govern and guide various departments of JRM while outsourcing any functions at the department level. The policy is intended for establishing a prudent practice on management of risks arising out of outsourcing with a view to preventing adverse systemic impact and to protect the interest of JRM and the REITs. • Ensure that the service providers are professionally qualified in carrying out the services • Carry out due diligence exercises which include background checks on the service providers, which may include background checks on the person or entity, a document verification process, or conducting interviews with the person to be appointed to undertake the key role in providing the services. • Undertake an ESG compliance assessment on the potential service providers to ensure that there are no environmental risks in the service providers’ activities • Require the service provider to sign a vendor Integrity Pledge to ensure compliance to policies relating to AntiBribery & Anti-Corruption, No-Gift, No Entertainment and Whistleblowing Policy. This is a part and parcel to combat bribery and corruption in an organisation. • Ensure that the service providers comply with other governance requirements such as undertaking data privacy protection as part of the contract terms. This aligns with the REIT’s pledge to enforce its Personal Data Protection (PDP) Policy in providing assurance to its data owners – tenants, directors, and employees that their personal data will be safeguarded and protected by the REIT. In addition, the company also requires service providers to take cognizant of the Anti-Money Laundering and Anti-Terrorism Financing Policy and all applicable laws to commensurate with the nature of the Company’s businesses and activities. Quality Assurance and Managing Performance • Conduct an annual performance assessment on the service providers and tabling the result to the Management Committee and the Board • In addition, the senior management team conducts regular discussions with property, maintenance, and service managers to discuss issues for improvement and to promote better understanding to facilitate cognizance in decisionmaking capability. During the year under review, one (1) meeting with the Maintenance Manager were carried out on 5th September 2024. BOARD COMMENTARY AND OPINION For the financial year under review, the Board has received written assurance from the CEO, the CFO that the REIT’s enterprise risk management and internal control systems, in all material aspects, are operating adequately and effectively. There were no material control failures or adverse compliance events that directly resulted in any material loss to the Group. Taking into consideration the information and assurance given by the CEO and the Head of Finance, the Board is satisfied that the enterprise risk management and internal control systems in place for the year under review and up to the date of approval of this Statement are sound and effective to safeguard the interest of all shareholders, the REIT’s assets, and other stakeholders. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
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