RISK MANAGEMENT (CONT’D) Board Audit and Risk Committee (BARC) (Cont’d) The main responsibility of the BARC are (Cont’d): The BARC with the Board Investment Committee and the Board Sustainability Committee, after deliberation with the Management also sets the risk appetite parameters revolving around key risk areas: Strategic, Finance, Operations, Compliance, Market, Partnerships, and ESG (Environmental, Social, and Governance) Risks. The Board Investment Committee (BIC) The BIC plays a crucial role in overseeing investment activities and ensuring they align with an organization’s risk appetite, objectives, and regulatory requirements. When it comes to managing risks, the committee’s responsibilities include: Statement on Risk Management and Internal Control • Conducts annual self-assessments of the Committee’s performance. • Recommends enhancements to the risk governance structure and processes. 10. Annual Evaluation & Continuous Improvement • Establish clear investment criteria (e.g., asset type, location, yield expectations, lease terms). • Set limits on exposure to high-risk property types or markets (e.g., speculative development, foreign currency risk). • Assess risks for each potential acquisition or disposal, including market, tenant, environmental, and operational risks. • Consider the impact on portfolio performance, gearing levels, and cash flow stability. • Maintain a diversified portfolio across asset classes (retail, office, industrial, etc.) and geographies. • Avoid over-concentration in any single asset, tenant, or region that could impact financial resilience. • Monitor compliance with REIT regulations (e.g., gearing limits, distribution obligations, allowable asset types). • Review alignment with the REIT’s investment mandate and fiduciary duties to unitholders. • Regularly review performance metrics, including occupancy rates, rental yields, and tenant profiles. • Stay informed on market trends and macroeconomic factors (e.g., interest rates, property cycles, inflation). 1. Defining Investment Risk Parameters 2. Evaluating Deal-Level Risks 3. Ensuring Regulatory and Fiduciary Compliance 4. Portfolio Diversification and Concentration Risk 5. Monitoring Portfolio and Market Risk 1 ABOUT US 137 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS 2 BUSINESS OVERVIEW
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