pg. 195 Corporate Governance Report Integrated Annual Report 2025 RISK GOVERNANCE, ASSESSMENT AND MANAGEMENT PROCESSES Al-Salām REIT operates a diversified property portfolio comprising of Retail outlets, Food & Beverage (F&B) restaurants, industrial assets and education/college asset. In line with Bursa Malaysia’s SORMIC, the Board provides leadership and oversight of risk management and internal control, with BARC assisting the Board in monitoring risk exposures and control effectiveness. Management is responsible for implementing risk management processes and internal controls, with a strong emphasis on integrity, ethical conduct, regulatory compliance, and transparency. This governance structure ensures that material risks are identified, assessed, mitigated, and monitored in a manner consistent with Al-Salām REIT’s risk appetite and strategic objectives. BOARD RESPONSIBILITY The Board affirms its responsibility for overseeing the REIT’s risk management and internal control system to safeguard unitholders’ interests and the REIT’s assets. The system is designed to provide reasonable, not absolute, assurance against material misstatement, operational disruption, financial loss, or breach of regulatory obligations. The Board oversees risk management through its specialised committees, each providing focused oversight across key risk areas. RISK GOVERNANCE STRUCTURE A robust governance structure comprises the Board and its Committees namely the BARC, BIC, BNRC, and BSC. Each committee provides focused oversight over its respective risk domains including financial reporting, investment risks, people and succession risks, and climate/ESG-related risks. The Governance Structure for the Risk Management and Internal Control is depicted below: STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL CHIEF EXECUTIVE OFFICER Board Audit and Risk Committee (BARC) Strategic Risks Financial Risks Operational Risk Compliance, Governance & Legal Risk MANAGEMENT INVESTMENT COMMITTEE (MIC) ENTERPRISE RISK MANAGEMENT COMMITTEE (ERMC) SUSTAINABILITY MANAGEMENT COMMITTEE (SMC) Board Nomination and Remuneration Committee (BNRC) Board Investment Committee (BIC) Board Sustainability Committee (BSC) Market Risks Business Continuity/ Disaster Recovery Risks Regulatory ESG Risks Climate Risks (Physical) Integrity Risks Partnership Risks Climate Risks (Transition) Emerging Risks (PESTLE) GOVERNANCE FRAMEWORK CONTEXT BOARD OF DIRECTORS External and Internal Auditor MANAGEMENT COMMITTEE (MC) Property Management Capital Management Refinancing Risk Covenant Risk Cost of Capital BUSINESS LINE MANAGEMENT/ RISK OWNERS Enterprise Risk Management Framework
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