STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLS Key Features of Internal Control (Cont’d) The key elements and/or features of the internal control system established for maintaining strong corporate governance are as follows (Cont’d): (h) Outsourcing Functions to Third-Party Service Providers (Cont’d) Quality Assurance and Managing Performance - Conduct an annual performance assessment on the service providers and tabling the result to the Management Committee and the Board - In addition, the senior management team conducts regular discussions with property, maintenance, and service managers to discuss issues for improvement and to promote better understanding to facilitate cognizance in decision-making capability. During the year under review, two (2) meetings with the Maintenance Manager were carried out on 10 May, & 2 August 2023. BOARD COMMENTARY AND OPINION For the financial year under review, the Board has received written assurance from the CEO, the Head of Finance that the REIT’s enterprise risk management and internal control systems in all material aspects, are operating adequately and effectively. There were no material control failures or adverse compliance events that directly resulted in any material loss to the Group. Taking into consideration the information and assurance given by the CEO and the Head of Finance, the Board is satisfied that the enterprise risk management and internal control systems in place for the year under review and up to the date of approval of this Statement are sound and effective to safeguard the interest of all shareholders, the REIT’s assets and other stakeholders. The following oversight mechanisms and information have been compiled for the Board’s oversight processes:- - periodic review of financial information covering financial performance and quarterly financial results; - BARC’s oversight of risk management framework changes in risk magnitudes and status of management implementation of risk mitigation plan; - Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks; - BARC’s review and consultation with Management on the integrity of the financial results and audited financial statements; - audit findings and reports on the review of systems of internal control provided by the internal auditors and the status of Management’s implementation of the audit recommendations; and - Management’s assurance that the Group’s risk management and internal control systems, including systems for compliance with applicable laws, regulations, rules directives, and guidelines have been operated adequately, effectively, and with integrity, in all material respects. The Board will continue to monitor all major risks affecting the Group take necessary measures to mitigate them and continue to enhance the adequacy and effectiveness of the risk management and internal control systems of the Group. 143 CORPORATE GOVERNANCE 1 2 3 5 6 AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2023
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