Al-`Aqar Healthcare REIT Annual Report 2020

Financial Reports 151 23. Financial risk management objectives and policies (cont’d) (a) Credit risk (cont’d) Amount due from a subsidiary The Fund provides unsecured advances to the subsidiary. The Fund monitors the results of the subsidiary regularly. As at the end of the reporting period, the maximum exposure to credit risk was represented by their carrying amounts in the statements of financial position. (b) Liquidity risk Liquidity risk is the risk that the Group and the Fund will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Fund’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Fund’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities. The Group and the Fund manage their operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of their overall liquidity management, the Group and the Fund maintain sufficient levels of cash and bank balances to meet their working capital requirements. As of 31 December 2020, the current liabilities of the Group has exceeded the current assets by RM475,258,715. The net current liabilities position are mainly derived from the IMTNs of RM575,000,000 which will come due in May 2021 as disclosed in Note 18. The Manager believes that the Group will meet their short term obligation as and when they fall due on the basis that the Group will be able to refinance their borrowings when it matures. As at the reporting date, the Group received various proposals from financial institutions on the refinancing plan. As at the date of the financial statements, the Group is assessing the available options and will finalise the refinancing plan by the maturity date in May 2021. Taking into consideration the viability of these available options, the Group is confident in materialising its refinancing plan before the maturity date. Accordingly, the Manager is of the opinion going concern basis used in the preparation of financial statements is appropriate. Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Group’s and the Fund’s financial liabilities at the reporting date based on contractual undiscounted repayment obligations: On demand or within One to More than one year five years five years Total RM RM RM RM Group As at 31 December 2020 Financial liabilities Other payables 8,853,336 - 10,353,946 19,207,282 Islamic financing 593,017,275 121,797,213 - 714,814,488 601,870,611 121,797,213 10,353,946 734,021,770 Notes to the Financial Statements For the Year Ended 31 December 2020