NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2023 19. Management Expense Ratio (“MER”) (Cont’d) The calculation of MER is based on the total fees of the Fund incurred for the year, including the Manager’s fees, Trustee’s fees, audit fee, tax agent’s fee and administration expenses, to the average net asset value of the Fund during the year calculated on a monthly basis. Since the average net asset value is calculated on a monthly basis, comparison of the MER of the Fund with other Real Estate Investment Trusts (“REITs”) which use a different basis of calculation may not be an accurate comparison. 20. 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 charges/(credits) other than those disclosed in Note 4 are as follows: Group Fund 2023 2022 2023 2022 RM RM RM RM Manager’s fee 4,430,769 1,851,471 4,430,769 1,851,471 Maintenance fee 1,202,160 1,098,480 1,202,160 1,098,480 Other income (532,000) (532,000) (532,000) (532,000) 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. 21. 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 2023 2022 2023 2022 RM RM RM RM Less than one year 112,680,509 112,168,484 106,837,832 106,440,368 Between one and five years 444,072,309 348,147,381 413,058,669 317,741,852 556,752,818 460,315,865 519,896,501 424,182,220 AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2023 FINANCIAL STATEMENTS 1 2 3 4 5 217
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