A L - S A L Ā M R E I T A N N U A L R E P O R T 2 0 2 1 102 CORPORATE GOVERNANCE STATEMENT Practice 8.1 : There is detailed disclosure on named basis for the remuneration of individual directors. The remuneration breakdown of individual directors includes fees, salary, bonus, benefits in-kind and other emoluments. The remuneration of the directors is paid by the REIT Manager and not by the Fund. However, the Board ensures that the remuneration policy takes into account the demands, complexities and performance of the Company as well as skills-set and relevant experiences required. For Independent Directors, the Board ensures that the remuneration does not conflict with their obligation to bring objectivity and independent judgment on matters discussed at the Board meetings. Practice 8.2 : The Board discloses on a named basis the top five senior management’s remuneration component including salary, bonus, benefits in-kind and other emoluments in bands of RM50,000. The Board is of the view that such disclosure may not be in the best interest of the Company due to confidentiality and security concerns. The details on the extent of the application of each CG practice as set out in the MCCG including the explanation for non-adoption of or departure from the abovementioned practices, are available in the CG Report for the financial year ended 31 December 2021. PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT The Board Audit and Risk Committee (BARC) The Board Audit and Risk Committee (BARC) is chaired by an Independent Non-Executive Director and consists of another Independent Non-Executive Director and a Non-Independent Non-Executive Director. The composition of the BARC, its duties and responsibilities as well as details of meetings attended by each member can be found in the Terms of Reference of the BARC, which is available on the website of Al-Salām REIT at www.alsalamreit.com.my The BARC assists the Board in carrying out its duties and responsibilities in fulfilling its responsibility for oversight with respect to ensuring the integrity of the Company’s financial statements, performance of the Company’s independent auditors and internal audit function, risk management practices and internal control of the company. The Enterprise Risk Management Committee (ERMC) The Enterprise Risk Management Committee (ERMC) is a management Committee established at the Company Level to identify potential events that may affect the Fund and the REIT Manager adversely, and systematically manage risk within its risk appetite, to provide reasonable assurance regarding the achievement of strategic objectives. ERMC also supports the BARC in fulfilling its oversight responsibilities with respect to ERM Policy & Framework and its processes, including risk assessment on key strategic, financial, operational and compliance risks. Other responsibilities of the ERMC include: (a) To coordinate the development of risk management policies and procedures and its initiatives to ensure an effective ERM framework is in place; (b) To review and deliberate risk reports and, where applicable, recommend mitigation strategies for implementation; (c) To provide regular updates to the BARC on respective mitigation measures and action plans relating to the respective residual risk profile and ERM initiatives; (d) To monitor, develop, review, assess and recommend to BARC on risk management strategies, policies and risk tolerance limits.
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