STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLS Enterprise Risk Management (ERM) Framework (Cont’d) The ERM process evaluation is undertaken by the ERMC every quarterly to assess and evaluate risks that may impede the Group from achieving its strategic and operational objectives, as well as developing action plans to mitigate such risks and to monitor Mitigation Performance. In ensuring that there is consistency in the methods used in managing risks throughout the organisation, both at the strategic and operational levels risk appetites were pre-determined to ascertain that the risk management efforts are aligned with the REIT’s business objectives. An expansion of risk appetite parameters and mitigation actions that relates to assets acquisitions/ disposals, joint ventures, business diversification and other corporate exercises deliberated and taken into consideration by the Management and the Board Investment Committee and the Board when recommending and approving the proposals. While Management team members are accountable for risk management in their particular portfolios, responsibility for good risk management rests with every staff member. Risk Owners are required to identify and effectively manage risk related to their core departmental activities. This is done to achieve an appropriate balance between realising opportunities for gains while minimising losses to the REIT. INTERNAL CONTROL SYSTEMS The Board and Management are committed to maintaining an effective internal control environment by continuously enhancing the design of internal control systems to ensure that they are relevant and effective to promote operational agility while ensuring corporate governance and compliance with regulatory guidelines. The internal control policy is designed to provide reasonable assurance regarding the achievement of objectives in the following categories: • Effectiveness and efficiency of operations • Reliability of financial reporting • Compliance with applicable laws and regulations Risk Reporting Frequency Reporting Party Reporting To Frequency of Reporting Reports to Be Submitted BARC BOD Quarterly • “Very High” Risk Profile • Status of Mitigation Plan • Project Risk • Special Risk Report on need basis ERMC CEO/ ED, BARC Quarterly • Updated risk profile and Risk Registers • Risk action plan and Status Updates • Special Risk Reports (when required) Risk Owners ERMC Monthly • Updated risk profile and Risk Registers • Risk action plan and Status Updates (when required) • Special Risk Reports (when required) Co-Owners Risk Owners Monthly • Updated risk profile and Risk Registers • Risk action plan and Status Updates (when required) • Special Risk Reports (when required) 137 CORPORATE GOVERNANCE 1 2 3 5 6 AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2023
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