Internal Control

Risk Management

The Board acknowledges its overall responsibility for the company’s system of internal control and for reviewing its effectiveness, whilst the role of Executive Management is to implement Board policies on risk and control.

Executive Management has implemented an internal control system designed to facilitate the effective and efficient operation of Al Arabiya Investment and its business units and aimed at enabling management to respond appropriately to significant risks to achieving Al-alamiya Investments’ business objectives. It should be noted that the system is designed to minimize, rather than eliminate the risk of failure to achieve Al-alamiya Investments’ business objectives, and can only provide reasonable, and not absolute, assurance against material misstatement or loss.

This system of internal control helps to ensure the quality of internal and external reporting, compliance with applicable laws and regulations, and internal policies with respect to the conduct of business.

The Board is responsible for the total process of risk management and the system of internal control. Executive Management is responsible for implementing appropriate mitigation and controls within their businesses. An independent Risk Management department, which is directly accountable to the Board Risk Committee and has unrestricted access to the Chairman of the Committee, is responsible for designing and reviewing the process of risk management.

Internal Audit

Al-alamiya Investments has an Internal Audit function that is commensurate with the size, nature and extent of business conducted by the Company. Internal Audit reports to the Board Audit Committee and has unrestricted access to the Chairman of the Board Audit Committee. A risk based audit approach is followed and the Board Audit Committee approves annual audit plans.

The scope of work of the Internal Audit department is to determine whether Al-alamiya Investments network of risk management, control and governance processes, as designed and represented by management, is adequate and functioning.

The Internal Audit function verifies the adequacy and effectiveness of internal controls from operation, financial and statutory compliance point of view through a blend of process and transactional audits.

Compliance & Anti-Money Laundering

Al-alamiya Investments has a well-established Compliance and Anti-Money Laundering (AML) Department structured upon Basel’s Consultative document titled “The compliance function in banks”. The Department is accountable to Al-alamiya Investments’ Senior Management. The Department identifies, assesses, and monitorsAl-alamiya Investments’ compliance risk covering regulatory sanctions, financial loss, or reputation loss which may come because of failure to comply with all applicable laws, regulations, and codes of conduct and standards of good practice. The Compliance & AML Department has designed a comprehensive yet flexible compliance program to provide reasonable assurance that the Company follows applicable laws and regulations issued by the Al-alamiya Investments’ regulators in various jurisdiction.

Al-alamiya Investments has institutionalized a Board approved Anti-Money Laundering Policy to ensure compliance with high standards of anti-money laundering and combating terrorism financing practices. The Policy applies equally to Kuwait as well other jurisdictions where Al-alamiya Investments has presence.

Financial Reporting

The Board of Directors is responsible for monitoring and reviewing the reliability of the financial statements, accounting policies and the information contained in the Annual Report. In undertaking this responsibility, the Board of Directors is supported by on-going processes for identifying, evaluating and managing risks we face. The processes are implemented by management and independently monitored for effectiveness by Internal Audit, Risk Management and Committees of the Board.

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