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Internal Control

The Board is responsible for maintaining and reviewing the effectiveness of risk management and internal control systems and for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives. Led by the Board, management designs procedures and implements control system for safeguarding assets against unauthorised use or disposal, maintaining proper accounting records and the reliability and usefulness of financial information used within the business or for publication, and ensuring compliance with laws and regulations affecting the business, operations and affairs of Link REIT. These procedures can only provide reasonable but not absolute assurance against material misstatement, errors, losses or fraud.
 
 
Three-line of Defense System
 
Our risk management process is guided by the Three Lines of Defence system, which allows the Board to consider control issues effectively. The Board receives regular reports through the Audit and Risk Management Committee and from the risk management and the internal audit functions.
 
 

1st Line of Defense – Internal Control and Operational Management
Control and monitoring procedures over compliance and risk management have been integrated into the daily operations with clear policies and procedures, which are reviewed on a regular basis to ensure their effectiveness. Every major department has its own set of operating policies and procedures to ensure that management is operating within an established control framework. Comprehensive training to staff ensures their understanding of the control and compliance requirements.
 
2nd Line of Defense – Risk Management and Compliance
The Risk Management and Compliance function monitors the effectiveness of the established enterprise risk management framework. It provides guidelines to business functions to facilitate their risk management processes, support management in assessing known and emerging risks and assist in developing the respective internal controls. Any irregularities identified at the functional level will be reported to the Risk Management and Compliance team for timely rectification.
 
3rd Line of Defense – Internal Audit
The Internal Audit function provides an independent and objective assurance to the Audit and Risk Management Committee on whether the control environments within the business are adequate. The Internal Audit function carries out independent reviews of key business processes and controls in accordance with its annual audit plan approved by the Audit and Risk Management Committee. It periodically reports to the Committee and has regular meetings with the chairman of the Committee. Key findings and recommendations for improvement and implementation are regularly reported to the Board through the Audit and Risk Management Committee. A whistle blowing policy has been in place such that possible improprieties may be detected earlier and brought to the attention of management and the Audit and Risk Management Committee. The external auditor also reports on any control issues identified in the course of its audit work.
 
Roles and Responsibilities
 
The Board has overall accountability for Link REIT’s enterprise risk management framework and is responsible for determining the nature and impact of risks on our business and ensuring appropriate mitigating strategies are in place. Both the Audit and Risk Management Committee and management are tasked with overseeing mitigation of risks in terms of exposure and external impacts and ensuring the processes in which risks are managed are fit for purpose. This ensures the appropriate governance and policy decision-making is rolled down into the organisation and appropriate resources are allocated. 
 
 
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