150 AL-SALĀM REIT STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLS ANNUAL REPORT 2023 BOARD’S RESPONSIBILITIES The board of directors and senior management practices risk management as an integral part of objective setting and optimisation of performance. To achieve a sound system of risk management and internal control, the board and management ensure that the risk management and control framework is embedded into the culture, core processes, and structures of the company. The framework is designed to be responsive to changes in the business environment, focussed on effective risk oversight and setting the tone and culture towards effective risk management and internal control. The Board’s approach towards overseeing the Group’s risk management framework and internal control systems is by designing the REIT’s risk appetite within the acceptable level of tolerance set by the Board and Management, rather than eliminating totally the risks of failure, in order to achieve the goals and objectives in generating potential returns to unitholders and ensuring a stellar financial performance of the REIT. THE GOVERNANCE STRUCTURE The Governance Structure for the Risk Management and Internal Control is depicted below: GOVERNANCE RISK COMMITTEE BOARD OF DIRECTORS BOARD AUDIT AND EXTERNA INTERNA AL AUDITOR AL AUDITOR FRAMEWORK CH BUSINES E COMMITTEE (ERMC) HIEF EXECUTIVE OFFICER (CE SS LINE MANAGEMENT/RISK O ENTERPRISE RISK MANAGEMENT E0) OWNERS T CONTEXT STRATEGIC RISKS FINANCIAL RISKS OPERATIONAL RIS MARKET RISKS CO S SKS PARTNERSHIP OMPLIANCE RISKS ESG RISKS RISKS
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