AL-SALAM REIT ANNUAL REPORT 2017

AL-SALĀM REIT ANNUAL REPORT 2017 107 The ERM practices are embedded into key activities and business processes, enabling proper risk management at the operation level of each property as well as the fund level. Risks identified shall be systematically evaluated with proper mitigating action plans developed to manage the risks to an acceptable level and monitored on a continuous basis. INTERNAL CONTROL The following key elements embody the current internal control system adopted by the Manager:- • The Board has put in place its own management reporting mechanisms which enable the Board to review the performance of the Manager and the Fund. • The Board approved annual budgets and business plans prepared by each property. • Investment strategies and criteria which are formulated by the management and agreed by the Executive Committee and/or recommendation on any acquisition or divestment would be presented to the Board for approval before forwarding to the Trustee for final approval. • Comprehensive policies and procedures manual that provide guidelines on, and authority limits over various operations, financial and human resources matters. • Regular management meetings involving the review of the operations and financial performance of each property. • The Audit Committee with formal terms of reference clearly outlining its functions and duties delegated by the Board. • The internal audit carried out by the outsourced internal auditor approved by the Audit Committee. • A systematic performance appraisal system for all levels of staff. • Relevant training provided to staff across all functions to maintain a high level of competency and capability.