SECTION 09 pg. 296 AL-SALĀM REIT NOTES TO THE FINANCIAL STATEMENTS - 31 December 2025 24. Capital management The Group and the Fund manage their capital to ensure that the Group and the Fund will be able to continue as going concern while maximising the return to unitholders through the optimisation of the debt and equity balance. The Group’s and the Fund’s overall strategy remain unchanged from 2018. The capital structure of the Group and the Fund consist of net debt (Islamic financing as detailed in Note 17) offset by cash and bank balances in Note 14 and unitholders’ capital of the Fund (Note 18) (comprising unitholders’ capital and undistributed income). The Group and the Fund are not subject to any externally imposed capital requirements. However, the Group and the Fund are required to comply with the SC Guidelines on borrowings. The SC Guidelines requires that the total borrowings of the Group and the Fund (including Islamic financing through issuance of debt securities) should not exceed 50% of the total asset value of the Group and the Fund at the time the borrowings are incurred. Notwithstanding, the Group’s and the Fund’s total borrowings may exceed this limit with the sanction of the unitholders by way of an ordinary resolution. The Manager’s risk management committee reviews the capital structure of the Group and of the Fund on a regular basis to ensure that the SC Guidelines are complied with. Gearing ratios The Group’s and the Fund’s gearing ratios are calculated based on the proportion of total Islamic financing to the total asset value. The gearing ratios at the end of the reporting period is as follows: Group Fund 2025 RM 2024 RM 2025 RM 2024 RM Islamic financing (Note 17) 630,698,014 639,778,034 177,757,426 187,526,884 Amount due to a subsidiary - - 452,837,741 450,604,258 630,698,014 639,778,034 630,595,167 638,131,142 Total assets value as per statements of financial position 1,315,346,990 1,317,265,108 1,311,392,299 1,311,077,422 Total Islamic financing total assets value ratio 47.9% 48.6% 48.1% 48.7%
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