Al-`Aqar Healthcare REIT Annual Report 2019

Audit Committee Report The audit committee plays a major role in corporate governance regarding the organisation’s direction, control, and accountability. As a representative of the board of directors and main part of the corporate governance mechanism, the audit committee is involved in the organisation’s both internal and external audits, internal control, accounting and financial reporting, regulatory compliance, and risk management. The audit committee will be ensuring independence to the internal and external auditors which give results to true and fair financial reporting that will meet the expectation of and protect the interests of all the stakeholders and mainly shareholders. COMPOSITION For the financial year ended 31 December 2019, the Audit Committee comprised of 3 Directors, all of whom are also members of the Board of the Manager. The composition of the Audit Committee is as follows:- 1. Zainah binti Mustafa Chairman/Independent Non-Executive Director 2. Lukman bin Hj. Abu Bakar Member/Non-Independent Non-Executive Director (resigned w.e.f 14 February 2020) 3. Dr. Mohd Hafetz bin Ahmad Member/Independent Non-Executive Director MEETINGS AND ATTENDANCE The Audit Committee held 4 meetings during the financial year and the details of attendance of the Committee Members are as follows:- Name of Committee Member attended No of meetings Zainah binti Mustafa Chairman/Independent Non- Executive Director 4 out of 4 Lukman bin Hj. Abu Bakar Member/Non-Independent Non- Executive Director (resigned w.e.f 14 February 2020) 4 out of 4 Dr. Mohd Hafetz bin Ahmad Member/Independent Non- Executive Director 4 out of 4 DISCHARGING OF FUNCTIONS & DUTIES During the financial year ended 31 December 2019, the Audit Committee has met its responsibilities in discharging its functions and duties in accordance with its terms of reference as follows:- 1. Overseeing Financial Reporting a. Reviewed and discussed with Management the quarterlymanagement accounts, taking into consideration that the necessary processes and controls are in place in the preparation of the financial reports. b. Reviewed and discussed the quarterly results with Management. The Committee also reviewed and discussed the annual financial statements and the External Auditors’ audit report with the External Auditors, as well as Management. Having satisfied itself that the financial results and reports complied with relevant accounting standards & legal requirement, the Audit Committee duly recommended the same for the Board’s approval. c. Minutes of previous Committee meetings were tabled at the subsequent Board meetings by the Audit Committee Chairman. Significant issues were highlighted together with followed up actions to rectify them were reported to the Board. d. The Committee took note of significant changes and amendments to the regulations, accounting standards and other regulatory requirements that could affect the financial reporting of Al-`Aqar. 2. Assessing Risks and Control Environment a. The Committee reviewed the adequacy andeffectivenessoftheriskmanagement framework and the appropriateness of Management’s responses to key risk areas and proposed recommendations for improvements to be implemented. b. The Management reported to the Committee on a quarterly basis, all identified risks that were recorded in a risk management scorecard which had facilitated systematic review and monitoring of the risk areas. 05 ESSENCE OF CORPORATE GOVERNANCE 90