Al-`Aqar Healthcare REIT Annual Report 2020

Financial Reports 149 21. Significant related party transactions Parties are considered to be related to the Group if the parties have the ability, directly or indirectly, to control the Group or exercise significant influence over the Group in making financial and operation decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. The Group and the Fund derive all their rental income as disclosed in Note 4 from related parties. Significant related party (credits)/charges other than those disclosed in Note 4 are as follows: Group Fund 2020 2019 2020 2019 RM RM RM RM Directors’ fees - 5,000 - - Manager’s fee 1,837,356 1,719,328 1,837,356 1,719,328 Maintenance fee 1,012,400 998,385 1,012,400 998,385 Registrar fee - 138,923 - 138,923 Secretarial fee - 2,640 - - Other income (532,000) (532,000) (532,000) (532,000) Purchase of investment property - 78,000,000 - 78,000,000 Other income relates to the compensation received from Selangor Medical Centre Sdn Bhd for loss of opportunity and annual loss of potential income due to the deferment for the transfer of a Physician Consultant Building to the Fund. The related party transactions described above were entered into in the normal course of business and are based on negotiated and mutually agreed terms. 22. Operating leases - Group as lessor The Group and the Fund lease out their investment properties under operating leases. The future minimum lease receivable under non-cancellable leases are as follows: Group Fund 2020 2019 2020 2019 RM RM RM RM Less than one year 92,333,647 114,927,099 80,897,143 103,490,595 Between one and five years 193,428,006 292,312,123 159,118,494 246,566,107 285,761,653 407,239,222 240,015,637 350,056,702 23. Financial risk management objectives and policies The Group and the Fund are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, financing rate risk and foreign currency risk. The Group and the Fund have taken measures to minimise their exposure to risks associated with their financing, investing and operating activities and operate within clearly defined guidelines as set out in the SC Guidelines. Notes to the Financial Statements For the Year Ended 31 December 2020

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