210 SECTION 07 AL-`AQAR HEALTHCARE REIT ASSURANCE AND CONTINUOUS IMPROVEMENT For the financial year 2025, the Manager appointed PKF Malaysia as the independent internal auditor to conduct a risk-based internal audit in accordance with professional standards. The scope includes evaluating the effectiveness of internal controls, reviewing compliance with policies and procedures, and assessing the robustness of the REIT’s risk management processes. Audit results, including identified gaps and recommended enhancements, are presented to the BARC for deliberation and follow-up action. This engagement strengthens assurance over governance, control effectiveness and alignment with the Risk Appetite. Internal Audit carried out two risk-based audits during the year, focusing on lease and tenant management and facility management. The audits identified several improvement areas, all of which were addressed by Management. Follow-up reviews confirmed that the corrective actions were completed and verified as satisfactorily closed. External Audits, Shariah and ESG Assurance External assurance mechanisms provide an added layer of independence and credibility to the REIT’s financial, operational, and Shariah-related controls. As part of the annual statutory audit, external auditors evaluated the adequacy and operating effectiveness of key financial reporting controls, focusing on areas such as revenue recognition, impairment assessment, capital expenditure, and compliance with accounting standards. Independent property valuers were also appointed to conduct professional valuations of the REIT’s investment properties to ensure that fair values used in the financial statements are objective, reliable, and supported by market evidence. In addition, Shariah advisers conducted monthly reviews covering lease arrangements, investment activities, financing structures, and compliance with Shariah principles. The findings were formally reported to Management and the Board. ESG-related disclosures and sustainability data were subjected limited external assurance to ensure accuracy, consistency, and alignment with the NSRF, IFRS S1/S2, and Bursa’s Sustainability Reporting requirements report on limited assurance can be found on sustainability statement section. This multi-layered assurance approach strengthens the reliability of the REIT’s reporting and reinforces stakeholder confidence. CONTINUOUS IMPROVEMENT AND CONTROL ENHANCEMENT The REIT is committed to continuously strengthening its internal control system to ensure it remains effective, relevant and responsive to changes in the operating environment. Improvement initiatives are driven by insights from internal audits, management reviews, ERMC deliberations, external assurance, regulatory developments and operational learnings. During the year, the Manager enhanced key controls by updating operational SOPs, improving documentation of critical processes, and refining control ownership and accountability across functions. Improvements were also made to financial and operational controls supporting asset management, tenancy administration, procurement and ESG reporting. Corrective actions arising from audit findings and compliance reviews were implemented promptly and monitored to closure, with progress reported to the BARC. The REIT also strengthened the integration of risk management and internal controls by refining its SORMIC narrative, enhancing risk reporting, and aligning internal control practices to the Board’s approved Risk Appetite. These initiatives contribute to improved control maturity, clearer governance expectations and greater consistency in the application of controls across the organisation. Continuous improvement remains an ongoing focus, and the Manager will continue to assess, enhance and digitalise internal controls to ensure they remain adequate and effective in safeguarding assets, supporting operational reliability and enabling sustainable long-term performance. Effectiveness Statement The continuous improvement initiatives implemented during the year were effective in strengthening the internal control environment and enhancing control maturity across the REIT. Management completed all planned enhancements, including SOP updates, process documentation improvements, control ownership clarification and corrective actions arising from internal audits and compliance reviews. These enhancements were verified through follow-up assessments and monitoring, with no material residual issues outstanding. The improvements contributed to more consistent control execution, better operational discipline and stronger alignment with the Board’s Risk Appetite. STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL
RkJQdWJsaXNoZXIy NDgzMzc=