Al-`Aqar Healthcare REIT Annual Report 2018

The Directors of DAMANSARA REIT MANAGERS SDN BERHAD (the “Manager”), the Manager of AL-`AQAR HEALTHCARE REIT (the “Fund”), have pleasure in submitting their report and the audited financial statements of the Group and of the Fund for the financial year ended 31 December 2018. THE FUND AND ITS INVESTMENT OBJECTIVE The Fund is a Malaysian-based real estate and investment trust, established on 28 June 2006 pursuant to the execution of a Trust Deed dated 27 June 2006 between the Manager and AmanahRaya Trustees Bhd (the “Trustee”). The Fund was listed on the Main Board of Bursa Malaysia Securities Berhad on 10 August 2006. The key objective of the Fund is to provide unitholders with stable distributions per unit and the potential for sustainable long-term growth of such distributions and net asset value per unit. The objective is sought to be achieved by optimising the performance and enhancing the overall quality for a large and geographically diversified portfolio of Shariah-compliant real estate assets through various permissible investment and business strategies. THE MANAGER AND ITS PRINCIPAL ACTIVITY The Manager is a company incorporated in Malaysia and is a wholly-owned subsidiary of Damansara Assets Sdn Bhd, a company incorporated in Malaysia. The Directors of the Manager consider Johor Corporation as the ultimate holding entity of the Manager, a body corporate established under the Johor Corporation Enactment No 4, 1968 (as amended by Enactment No. 5, 1995). The principal activity of the Manager is that of managing real estate investment trusts. There has been no significant change in the nature of the activity during the financial year. MANAGER’S INVESTMENT STRATEGIES AND POLICIES To achieve the Fund’s primary objective, the Manager will seek to achieve the following strategies: (i) Portfolio Composition The Fund’s investments may be allocated in the following manner, as prescribed by the Guidelines on Real Estate Investment Trust (“Guidelines on REITs”) and the Guidelines for Islamic Real Estate Investment Trust (“Guidelines on Islamic REITs”): (a) at least 75% of the Fund’s total assets shall be invested in Shariah-compliant real estate, single-purpose companies which are Shariah-compliant, Shariah-compliant real estate-related assets or liquid assets; (b) at least 50% of the Fund’s total assets must be invested in Shariah-compliant real estate or single-purpose companies which are Shariah-compliant; and (c) the Fund’s investment in other Shariah-compliant assets (such as Shariah-compliant non-real estate-related assets and/or cash deposits and money market instruments) must not exceed 25% of the Fund’s total assets value. (ii) Diversification The Fund will seek to diversify its Shariah-compliant real estate portfolio by property and location type. The Fund will primarily be focused on investing in real estates which are primarily used for healthcare purposes and will continue to look for opportunities that will provide attractive returns. (iii) Leverage The Fund will be able to leverage on its financing to make the permitted investments. Leveraging on its financing will enable the returns to unitholders to increase. Al-`Aqar Healthcare REIT • Annual Report 2018 90 FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 MANAGER’S REPORT