138 UNITED HAMPSHIRE US REIT Corporate Governance 8. TALENT ATTRACTION AND RETENTION RISK Human capital is a key function to enabling the Manager to achieve its strategic business goals. Loss of key management personnel and key employees could cause disruptions to business operations. In addition, the competition for talent in the REIT management industry is keen and there is a need to minimize the potential staff movement which would cause undue disruptions to the management team. To help retain talent, the Manager places a high emphasis on staff engagement and development of employees which aids in staff retention and ensuring relevant and highly skilled workforce for long-term business growth. Regular remuneration and benefits benchmarking are conducted to attract and retain appropriate talent for the business. Annual surveys are also deployed to gather feedback and measure employee engagement. The Manager also has succession plans in place whereby the CEO and CFO are capable of taking on other KMP roles. In the event of an absent Chairman, the NRC will appoint an existing Director as and when required. INTERNAL CONTROLS At the same time, the CEO and CFO provide the Board with written assurances as to the adequacy and effectiveness of their system of internal controls and risk management annually. For FY2025, the Board has received assurance from the CEO and the CFO of the Manager that: a. the financial records of UHREIT have been properly maintained and the financial statements for FY2025 give a true and fair view of UHREIT’s operations and finances; and b. the risk management and internal control systems of UHREIT are adequate and effective to address the risks (including strategic, financial, operational, compliance and IT risks) that the Manager considers relevant and material to the current business environment. The Internal Auditors conduct reviews of the adequacy and effectiveness of the material internal controls and risk management systems. These include testing, where practicable, material internal controls. The ARC reports to the Board on material findings and makes recommendations or seeks guidance from the Board in respect of any material risk issues. The ARC directs and reviews the adequacy and work scopes of Internal Auditors. Any findings on material non-compliance or weaknesses in internal controls and risk management by the Internal Auditorsare reported directly to the ARC. Recommendations for enhancing the internal control system and risk management system are reported to the ARC and Management takes appropriate action based on these suggestions. Based on the risk management and internal control systems established and maintained by the Manager, the above-mentioned assurances received from the CEO and CFO, work performed by the Internal and External Auditors, reviews conducted by Management and various Board Committees, the Board, with the concurrence of the ARC, is of the opinion that UHREIT’s internal controls (including financial, operational, compliance and IT controls) and risk management systems in place are adequate and effective to address the risks faced by UHREIT in its current business environment as at 31 December 2025. The Board notes that the internal control systems established provide reasonable assurance that UHREIT will not be adversely affected by events that could be reasonably foreseen as it strives to achieve its business objectives. However, the Board notes that no system of risk management and internal controls can provide absolute assurance in this regard, or absolute assurance against poor judgement in decision-making, human error, losses, fraud or other irregularities. The Board, together with the ARC and Management, will continue to enhance and improve the existing risk management and internal control frameworks to identify and mitigate these risks.
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