STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLS The Board also carries out an annual assessment of risk management and internal control on all significant aspects of risks and internal control of the REIT in its Strategic Planning report, particularly on: • The nature and extent of significant risks, in the current and upcoming years; • The company’s ability to respond to changes in its business and the external environment; • The work of its internal audit and risk management (where applicable) units and other assurance providers; • The incidence of significant control failings or weaknesses that were identified at any time and their impact on the company’s performance or condition (financial or otherwise); • Any events that impacted the achievement of objectives that were not anticipated by management; and • The adequacy and effectiveness of the risk management and internal control policies as a whole. RISK MANAGEMENT Board Audit and Risk Committee (BARC) The review of the effectiveness of risk management and internal control is carried out at least quarterly. The board delegates its role in the review process to the Audit and Risk Committee (BARC), which is chaired by an Independent Director who is also a member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants. The board as a whole, is committed and responsible for the execution of the delegated role of the BARC primarily related to the outcome of the review and disclosure of key risks and internal control. The main responsibilities of the BARC are: • To assist the Board in ensuring a sound and robust Enterprise Risk Management framework and its implementation to enhance risk-based Corporate Governance practices. The Terms of Reference (ToR) and main duties of the BARC about risk management are detailed on the website at www.alaqar.com.my. ERMC/ Compliance & Risk Management Department Business Line Management/ Risk Owners Responsibilities • Oversees the operationalisation of risk management strategies as well as frameworks and policies. • Independent reporting to the management and BARC • Advisor to Business Line Management/ Risk Owners Process Monitors the consistent enforcement of ERM policy, reviews and endorses risk parameters, risk appetite, risk profile, and treatment options and risk action plans. Responsibilities • The Senior Management is primarily responsible for managing process, • They are also responsible for controlling risks by using business control and compliance frameworks, implementing internal control processes, and adequate control • Manage day-to-day risk inherent in business activities as guided by the established risk strategies, frameworks, and policies Process Identification and assessment of risk, implementation, and monitoring of risk action plans. 133 CORPORATE GOVERNANCE 1 2 3 5 6 AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2023
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