121 ANNUAL REPORT 2022 (h) Reviewed the SORMIC which provided an overview of the state of internal controls prior to the Board’s approval for inclusion in the Annual Report. The SORMIC which had been reviewed by the External Auditors is set out on pages 132 to 140 of this Annual Report. (i) R eviewed the effectiveness of the internal audit function through evaluation of its performance and competency, and monitoring the sufficiency of resources and costs, to ensure that it has the required expertise and professionalism to discharge its duties Internal Audit (a) P rovided input on key areas to be included as part of the annual Internal Audit Plan. Deliberated the risk-based Internal Audit Plan to ensure adequate scope and comprehensive coverage of business activities, prior to recommending to the Board for approval. (b) M onitored the progress of the approved Internal Audit Plan, including the status of the planned reviews and approved changes to the Internal Audit Plan due to changes in business and/or risk environment (c) R eviewed and deliberated on internal audit reports, the audit recommendations and adequacy of Management’s response to these recommendations. Significant issues were discussed at length with the presence of relevant Management team members to ensure satisfactory and timely remediation actions have been committed by Management to address identified risks. (d) M onitored the implementation of corrective action plans agreed by the Management on outstanding audit findings on a quarterly basis to ensure that all actions have been implemented on a timely basis in the related areas (e) D iscussed with the Compliance & Risk Department, to provide assurance of the soundness of internal control systems and activities of the REIT and the REIT Manager. (f) R eviewed the effectiveness of the internal audit function through evaluation of its performance and competency, and monitoring the sufficiency of resources and costs, to ensure that it has the required expertise and professionalism to discharge its duties (g) Reviewed the SORMIC which provided an overview of the state of internal controls prior to the Board’s approval for inclusion in the Annual Report. The BARC was satisfied that the system of risk management and internal control as described in the Statement on Risk Management and Internal Control, was sound and effective, providing reasonable assurance that the structure and operation of controls were appropriate for the REIT’s operations. The BARC also acknowledged that implementation measures were continuously taken to strengthen the system of risk management and internal control so as to safeguard the interests of stakeholders including shareholders’ investments, and the REIT’s assets. Risk Management and Internal Control (a) R eviewed quarterly top risk profiles which covers Strategic, Finance, Operational and Compliance Risks and deliberated on the significant threats and opportunities, including status and adequacy of mitigation strategies. (b) D iscussed the improvements to the Enterprise Risk Management framework and process to ensure proactive and holistic risk identification, and monitoring of mitigation actions to reduce risk impact to an acceptable level. (c) R eviewed the status of the planned mitigation actions developed from the results of the Compliance risk assessment performed in 2022. (d) E valuated the overall adequacy and effectiveness of internal controls through review of the work performed by both internal and external auditors, other assurance providers and through discussions with Management (e) E nsures appropriate controls are in place in management of the Fund, that the Manager has a well defined organisational structure with clear lines of responsibility and a comprehensive reporting system and adequate procedures in financial reporting, risk management, internal control and are in place. Further details in respect of risk management and internal controls are set out on pages 132 to 140 (SORMIC of this Annual Report). Details in respect of the principal risks and uncertainties are set out on pages 57 to 58 under Management Discussion and Analysis. (f) R eviewed and deliberated on four frameworks relating to compliance and internal controls and recommended to the Board the implementation of the frameworks and policies put forward by the Management, listed as below: BOARD AUDIT AND RISK COMMITTEE REPORT
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