Al-`Aqar Healthcare REIT Annual Report 2020

AL-`AQAR HEALTHCARE REIT Annual Report 2020 156 25. Capital management (cont’d) The Group and the Fund are required to comply with the financial covenants as disclosed in Note 18 and the SC Guidelines on capital requirements. As at 31 December 2020, the Group and the Fund had complied with all financial covenants as disclosed in Note 18. Gearing ratios are calculated based on the proportion of total borrowings to the total asset value in accordance with Securities Commission Malaysia (“SC”) Guidelines. On 12 August 2020, the SC announced that it will temporarily increase the gearing limit for Malaysian REITs from 50% to 60%, effective immediately until 31 December 2022. Notwithstanding, the Fund’s total borrowings may exceed this limit with the sanction of the unit holders 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 ratio are calculated based on the proportion of total borrowings to the total asset value. The gearing ratio at the end of the reporting period is as follow: Group Fund 2020 2019 2020 2019 RM RM RM RM Total borrowings 683,587,255 683,435,584 664,303,048 664,714,243 Total assets value 1,647,986,337 1,674,351,935 1,647,844,525 1,650,198,629 Total borrowings to total assets value ratio 41.48% 40.82% 40.31% 40.28% 26. Portfolio Turnover Ratio (“PTR”) Fund 2020 2019 RM RM PTR (times) - 0.08 The calculation of PTR is based on the average of total acquisitions and total disposals of investments in the Fund for the year to the average net asset value during the year calculated on a monthly basis. 27. Comparative figures In the previous financial year, the Group and the Fund obtained Islamic Financing of RM78,000,000 to finance the acquisition of KPJ Batu Pahat Specialist Hospital for a cash consideration of RM78,000,000. The acquisition was completed on 28 December 2019. For the financial year ended 31 December 2019, cash flows from financing and investing activities were both understated by RM78,000,000. The reclassification had been had been restated in the statement of cash flows, as follows: As previously Re- As stated classification restated RM RM RM Group and Fund At 31 December 2019 Cash flows from financing activities Net proceeds from Islamic financing 2,000,000 78,000,000 80,000,000 Cash flows from investing activities Addition of investment property - (78,000,000) (78,000,000) Notes to the Financial Statements For the Year Ended 31 December 2020