128 AL-SALĀM REIT ANNUAL REPORT 2023 The BARC executes its oversight function by reviewing and deliberating on the audit issues, audit recommendations as well as Management’s responses to these recommendations. Where appropriate and applicable, the BARC directed the Management to take cognizance of the issues raised and established necessary steps to strengthen the system of internal control based on PKF’s recommendations. To ensure effective management and independence of BARC, the BARC is empowered by its TOR to: (a) Convene meetings with the Internal Auditor without the attendance of any executive, whenever deemed necessary. (b) Approve, then inform the Board of the appointment of the Internal Auditor; and (c) Review and assess the performance of the Internal Auditor. The BARC is satisfied that the PKF has been effective and able to discharge its duties and responsibilities. Risk Management Risk management remains the responsibility of the Board. The BARC has delegated responsibility to keep under review the adequacy and effectiveness of the Company’s internal financial controls and the internal control and risk management system. Risk management is reviewed at the BARC and the Board meetings as part of the formal Board process. The Board has identified and evaluated the significant risks faced by the REIT in delivering its strategy. Details of the principal risks identified are set out in the MDNA on pages 4344 of the 2023 Annual Report. The BARC meets quarterly specifically to review the effectiveness of the Group’s risk management and internal control systems and to review the risks identified and the progress of actions taken to manage the risks. Following the review, progress and actions are reported to the Board. The Enterprise Risk Management Committee ("ERMC") supports the BARC in implementing, monitoring, and assessing the mitigation actions of the identified risks. The Board is satisfied that the BARC has demonstrated an appropriate level of vigilance and diligence towards, among others, the detection of any financial anomalies or irregularities in the financial statement. The full details of the BARC activities in 2023 are elaborated in the Annual Report on pages 132-138. CORPORATE GOVERNANCE OVERVIEW STATEMENT
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