96 AL-SALAM REIT STRONG CORPORATE GOVERNANCE GRI 102-16 | 102-17 Regulatory Compliance The key national laws, regulations and guidelines applicable to the REIT’s business include and are not limited to: Capital Market Services Act 2007 Income Tax Act 1967 Main Market Listing Requirements EPF Act 1991 Guidelines on Listed REITs Malaysian Code on Corporate Governance (“MCCG”) Guidelines on Islamic Capital Market Products and Services Guidelines on Corporate Governance for Capital Market Intermediaries A comprehensive compliance report detailing the requirements for various acts, risk treatment, the REIT’s mitigation plans, and risk ratings is maintained by the Manager, to ensure the REIT remains compliant with relevant legal and statutory requirements. In addition, the Manager conducts training on legal requirements, obtains legal advice from professionals, and requires all internal audits be performed by external consultants to maintain impartiality. It is also crucial that tenants abide by all stipulated legal requirements and agreements, such as the Uniform By-Laws 1984, the Fire Services Act 1988, and the Lease/Tenancy Agreement. To that end, REIT has taken the initiative to send notifications to tenants as a reminder to comply with these requirements. We also organise monitoring sessions for respective departments, contractors, and consultants to ensure adherence to these regulations. Furthermore, the REIT makes requests for insurance cover notes that indicate properties are protected in the case of hazards such as fire. We established a manual notification planner supervised by the Building Manager or the Operations HOD, which indicates when building-related licences are to be renewed. To further enhance these initiatives, the Board regularly receives legal and secretarial updates in order to stay updated with developments in regulation. Moreover, both management personnel and the Board are encouraged to attend relevant talks and seminars, and the Manager is notified about relevant changes from Bursa Malaysia, the Securities Commission, and the Malaysian REIT Managers Association (“MRMA”). Initiatives taken to ensure compliance with relevant laws and regulations are communicated internally via management meetings, announcements, and briefings, while done externally via Annual General Meetings, analyst briefings, the REIT’s corporate website, and annual reports. All questions are directed via email to a designated individual. In the financial year 2022, the REIT has not recorded any incidents of non-compliance. Risk Management To ensure the longevity and stability of the business as a REIT, it is vital to appropriately manage all risks. Risk management is thus overseen by the Board Audit and Risk Management Committee (“BARC”), assisted by the Enterprise Risk Management Committee (“ERMC”). These committees are responsible for ensuring risk management is embedded in the Manager’s scheduled daily tasks. They are also charged with identifying risk parameters, appetite, profiles, treatment options, action plans, and indicators. The Manager assesses risks on a quarterly basis, following the Enterprise Risk Management (“ERM”) Policy and Framework. All findings are compiled into a detailed risk register, which is divided into the following categories: strategic, financial, operational, compliance, IT, and integrity risks. For the review this year, the Manager updated the ERM Policy and Framework that became effective on December 1, 2022. These changes take into account the re-classification of Risk Category to include ESG Risk, Market Risk and Partnership Risk. The Manager has also conducted a risk assessment for the supplier’s environmental and social issues, labour issues, health and safety issues, tax issues, and finally data protection. There was no high risk identified during the course of the assessment. Risk owners are designated at the Risk Identification stage and are tasked with reporting the progress of risks and associated mitigation plans at weekly Management Committee meetings. Risk owners communicate with the employees regarding the risks, and also identify the risks to their operations and the associated mitigation plans, presenting them to the ERMC and/or at weekly Management Committee meetings. The ERMC holds quarterly meetings to ensure effective communication of risks and mitigation plans. Subsequently, the updated Risk Profiles were presented at the quarterly BARC meetings. SUSTAINABILITY STATEMENT
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