CORPORATE GOVERNANCE 96 Al-`Aqar Healthcare REIT | Annual Report 2024 THE BOARD AUDIT AND RISK COMMITTEE REPORT Terms of Reference The duties and responsibilities of the BARC are set out in its Terms of Reference which is accessible in the Corporate Governance section, on the website at www.alaqar.com.my SUMMARY OF WORK CARRIED OUT DURING FINANCIAL YEAR The BARC shall meet at least 4 times annually and the Internal Auditor, the Head of Finance and the Head of Compliance and Risk shall attend the meetings. Relevant members of Senior Management shall be invited to attend these meetings to assist to clarify matters raised at the meetings. A majority of independent Directors present shall form a quorum. The BARC shall meet with the External Auditors without the executive Board members and Management being present at least twice a year. Meeting papers were circulated to all the BARC members prior to the meetings by way of electronic means. Minutes of each BARC Meeting were recorded and tabled for confirmation and adoption at the next BARC Meeting and subsequently presented to the Board for approval and notation. The Chairman of the BARC shall report on each meeting to the Board. The BARC carried out the following work during the financial year ended 31 December 2024 in the discharge of its functions and duties:- Overseeing Financial Reporting (a) At the meeting held on 14 February 2024, the External Auditors presented to the BARC the results of the FYE2023 audit conducted on Al-`Aqar Healthcare REIT where significant audit matters listed below are discussed: i. Valuation of investment properties ii. Expected credit losses of trade receivables iii. Going concern considerations and compliance with loan covenants (b) Reviewed the audited financial statements of Al-`Aqar Healthcare REIT for the financial year ended 31 December 2023 (“FYE2023”), which were prepared in accordance with the Trust Deed, the applicable Securities Commission Malaysia (“SC”) rules and guidelines and Malaysian Financial Reporting Standards (“MFRS”), prior to recommending the same to the Board for approval. The audited financial statements of the REIT for FYE2023 were issued and circulated to the Unitholders in line with the prescribed requirements. (c) Reviewed at every quarterly meeting held in FYE2024, the quarterly financial results for public release to ensure adherence to legal and regulatory reporting requirements before recommending the same to the Board for approval. (d) Reviewed and discussed with Management the quarterly management accounts, taking into consideration that the necessary processes and controls are in place in the preparation of the financial reports. (e) Reviewed, at each quarterly meeting, the income distributions of the Fund which were made in accordance with the distribution policy, in order to ensure the adequacy of the realised income for each distribution prior to recommending the proposal to the Board. (f) Kept abreast on the application of the new accounting standards, i.e. Malaysian Financial Reporting Standards (“MFRS”). (g) The BARC was satisfied that adequate impact assessment had been carried out by Management and the accounting policies as shown below had been appropriately updated in the financial statements of the Fund for FYE2024. Description Effective for Annual Period Beginning on or After Amendments to MFRS 101: Classification of Liabilities as Current or Non Current 1 January 2024 Amendments to MFRS 16: Lease Liability in a Sale and Leaseback 1 January 2024 Amendments to MFRS 101: Non-current Liabilities with Covenants 1 January 2024 Amendments to MFRS 107 and MFRS 7: Supplier Finance Arrangements 1 January 2024 External Audit (a) Reviewed and discussed with External Auditors on 14 November 2024 the audit planning memorandum for FYE2024 covering the audit objectives and approach, audit plan, key audit areas and relevant technical pronouncements and accounting standards issued by Malaysian Accounting Standard Board (‘’MASB’’), and regulating requirements applicable to the REIT; and the processes and controls in place to ensure effective and efficient financial reporting and disclosures under the financial reporting standards. (b) Reviewed and discussed with External Auditors the results of the audit and the audit report in particular, significant accounting matters arising from the external audit and their opinion on the financial statements.
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