SECTION 07 pg. 178 AL-SALĀM REIT BOARD AUDIT AND RISK COMMITTEE REPORT External Audit (a) Reviewed and discussed with External Auditors on 12 November 2025 the audit planning memorandum for 2025 covering the audit objectives and approach, audit plan, key audit areas and relevant technical pronouncements and accounting standards issued by Malaysian Accounting Standard Board (“MASB”), and regulating requirements applicable to the REIT; and the processes and controls in place to ensure effective and efficient financial reporting and disclosures under the financial reporting standards. (b) Reviewed and discussed with External Auditors the results of the audit and the audit report in particular, significant accounting matters arising from the external audit and their opinion on the financial statements. (c) Reviewed with External Auditors the memorandum of comments and recommendations arising from their study and evaluation of the system of internal and accounting controls together with Management’s response to the findings of the External Auditors and ensured where appropriate, that necessary corrective actions had been taken by Management. (d) Evaluated the performance and assessed the suitability, objectivity and independence of the External Auditors during the year in accordance with the policies and procedures in place, vide a set of questionnaires covering the calibre of the external audit firm; quality of processes and performance; skills and expertise including industrial knowledge; independence and objectivity; audit scope and planning; audit fees; and their communications with the BARC. The BARC had received from the External Auditors written confirmation on their independence and which disclosed their policies on independence, safeguards, and procedures to address threats or perceived threats to their independence and objectivity, and that they were in compliance with the independence requirements set out in the By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants. (e) Having satisfied with the performance and the assessment on the External Auditors’ suitability, objectivity and independence, recommended to the Board the re-appointment of the External Auditors and their remuneration. (f) Reviewed and approved the non-audit fees in respect of services rendered by the External Auditors. The nonaudit fees for the FY2025 amounted to RM20,000. (g) Met with the External Auditors without executive Board members and Management on 12 February 2025 and 12 November 2025 to discuss matters in relation to their review. (h) Reviewed the SORMIC which provided an overview of the state of internal controls prior to the Board’s approval for inclusion in the IAR2025. The SORMIC which had been reviewed by the External Auditors is set out on pages 193 to 218 of the IAR2025. Internal Audit Internal audit activities for the financial year ended 2025 were conducted based on a risk-based internal audit plan approved by the BARC, focusing on higher-risk operational areas. The internal audit function of Al-Salām REIT is outsourced to an independent external professional firm, Messrs. PKF Risk Management Sdn Bhd (“PKF”), which reports functionally to the BARC and is independent of the management and operations of the REIT. During the financial year, internal audit reviews covered asset acquisition and disposal as well as property and facility management. A total of 6 audit issues were raised, comprising 3 low-risk issues and 2 moderate-risk issues.1 high-risk issue was identified, however, no instances of fraud, material control breakdowns or systemic weaknesses were reported.
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