pg. 193 Corporate Governance Report Integrated Annual Report 2025 STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL Pursuant to Paragraph 15.26(b) of the Main Market Listing Requirements (LR) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board of JLG REIT Managers Sdn Bhd (“the Manager”) as the manager of Al-Salām REIT is required to provide a statement on the adequacy and effectiveness of the REIT’s risk management and internal control system. The REIT has aligned its risk management and internal control practices with the updated SORMIC Guide 2025, which introduces enhanced expectations compared to the earlier 2012 guidance. The revised guide places stronger emphasis on integrated risk management, Board accountability, and alignment with internationally recognised frameworks including COSO, ISO risk standards, and the Malaysian Code on Corporate Governance. The REIT’s risk governance processes, policies and reporting have therefore been strengthened to reflect these updated expectations, ensuring that risk management is embedded across the organisation and remains responsive to evolving business, regulatory and sustainability requirements. EXECUTIVE SUMMARY Al-Salām REIT has undertaken a structured transition plan to strengthen its risk governance, internal controls and reporting processes. The plan focuses on embedding integrated risk management practices, strengthening Board oversight, enhancing transparency, and aligning internal processes with internationally recognised risk frameworks. Actions Taken / In Progress: • Updated Risk Appetite Statement to reflect strategic, financial, operational, compliance and ESG risk thresholds. • Enhanced BARC reporting to include risk trends, emerging risks, results, and deviations from risk appetite. • Established a clearer delineation of responsibilities between the Board, BARC, Management, and Internal Audit. • Introduced structured escalation protocols for breaches of risk tolerance. Outcome: More explicit Board accountability and stronger governance alignment with SORMIC 2025. 1. Strengthening Risk Governance & Board Oversight Actions Taken : • Incorporated risk assessment into strategic planning, acquisitions/disposals, and capital management decisions. • Updated the risk register to ensure all strategic, market, ESG and financial risks reflect aligned scoring and residual impact. • Introduced scenario and sensitivity analyses (e.g., DPU stress tests, valuation risks, interest rate scenarios). Outcome: A stronger link between strategy execution and risk governance, as required by the updated guide. 2. Integrating Risk Management with Strategic Planning
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