Independent Auditors’ Report to the Unitholders of Al-Salām Real Estate Investment Trust and Its Subsidiary (Incorporated In Malaysia) Report on the audit of the financial statements (Cont’d) Valuation of investment properties (Cont’d) We have identified this as an important area of our audit given the significance of the investment properties and the complex valuation method which is based on assumptions that are highly judgmental. Our audit procedures focused on the valuations performed by firms of independent valuers, which included, amongst others, the following procedures: • We considered the objectivity, independence and expertise of the firms of independent valuers; • We obtained an understanding of the methodology adopted by the independent professional valuers in estimating the fair value of the investment properties and assessed whether such methodology is consistent with those used in the industry; • We had discussions with the independent professional valuers to obtain an understanding of the property related data used as input to the valuation models which included, amongst others, rental income data, yield rate and discount rate; • We tested the accuracy of rental income data applied in the valuation by comparing them with lease agreements and challenged yield rate by comparing them with available industry data, taking into consideration comparability and market factors; • We assessed whether the discount rate used to determine the present value of the cash flows reflects the estimated market rate of return for comparable assets with similar profile; and • We also evaluated the Group’s and the Fund’s disclosures on those assumptions to which the outcome of the valuation is most sensitive. The disclosures on the valuation sensitivity and significant assumptions used are included in Note 3.2 and 10 to the financial statements. Information other than the financial statements and auditors’ report thereon The Manager of the Fund is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Fund and our auditors’ report thereon, which we obtained prior to the date of this auditors’ report. The Group’s 2024 Annual Report is expected to be made available to us after the date of this auditors’ report. Our opinion on the financial statements of the Group and of the Fund does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Group and of the Fund, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Fund or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 184 AL-SALĀM REIT ANNUAL REPORT 2024
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