Al-`Aqar Healthcare REIT Annual Report 2019

Risk monitoring and review will:- • ensure risks appropriately reflect the reality of the DRMSB’s operating environment; • involve the review of risk ratings (likelihood & Impact); • existing risk controls/treatment plans and recommend changes to treatment priorities & timeframes; and • include consideration of the appropriate “responsible person(s)” for ongoing monitoring and review of risks. Additionally, monitoring andmeasuring includes evaluation of the risk awareness culture and the risk management framework, and assessment of the extent to which risk management tasks are aligned, suitable, adequate, and effective way of achieving established objectives. This will enable the internal audit function to periodically review the effectiveness of the risk management function and providing an independent view on specific risks and control issues, the state of internal controls, trends and events. When the need arises, the Manager will review the risk management framework and risk management process which involves the review of risk management policy and plans as well as risks, risk categories, risk treatments, controls, residual risks, and risk assessment process. Based on results of monitoring and reviews, decisions should be made on how the risk management program can be improved. These decisions should lead to improvements in the organisation’s management of risk and its risk management culture. INTERNAL CONTROL The following key elements embody the current internal control system adopted by the Manager:- a. The Board has put in place its own management reporting mechanisms which enable the Board to review the performance of the Manager and the Fund. b. The Board approved annual budgets and business plans prepared by each property. c. Investment strategies and criteria which are formulated by the management and agreed by the Executive Committee and/ or recommendation on any acquisition or divestment would be presented to the Board for approval before forwarding to the Trustee for final approval. d. Comprehensive policies and procedures manual that provide guidelines on, and authority limits over various operations, financial and human resources matter. e. Regular management meetings involving the review of the operations and financial performance of each property with Property Managers and the Trustee. f. The Audit Committee with formal terms of reference clearly outlining its functions and duties delegated by the Board. g. The internal audit reviews carried out by the outsourced internal auditor based on the risk-based internal audit plan approved by the Audit Committee. h. A systematic performance appraisal system for all levels of staff. i. The Code of Ethics and Business Conduct has been 2019 to mitigate Integrity Risks. ** A briefing on Anti-Bribery Management System (ABMS) ISO 37001: 2016 has been carried out on 17 October 2019 to instil awareness among the employees on the new standard. ** CEO/ Senior management attended a Briefing on Corporate Liability Provision And Anti-Corruption, which aimed to create awareness and bring insights into the corporate liability provision, Guidelines on Adequate Procedures and anti-corruption measures. The session was carried out by the SC on 1 Nov 2019. j. The Management has also reviewed its Standard Operating Procedure (“SOP”) for the Manager and the funds, across all departments. k. Relevant training provided to staff across all functions to maintain a high level of competency and capability. 05 ESSENCE OF CORPORATE GOVERNANCE 96