114 AL-SALAM REIT 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, the 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. CORPORATE GOVERNANCE OVERVIEW STATEMENT
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