192 SECTION 07 AL-`AQAR HEALTHCARE REIT PROCESS FOR IDENTIFYING, ASSESSING AND PRIORITISING RISKS The risk assessment process provides a structured approach for identifying, analysing and prioritising the risks that may affect Al-`Aqar’s strategic, operational, financial, compliance and sustainability objectives. Al-`Aqar adopts a disciplined risk appetite, accepting moderate strategic and financial risks that support long-term value creation while maintaining low tolerance for risks that could compromise income stability, financial integrity, regulatory compliance or reputation. Risk Objectives and Risk Appetite Category Risk Appetite Statement Tolerance Level Strategic Pursue value-accretive acquisitions and disposals that enhance long-term portfolio performance. • High appetite for growth initiatives; • Low tolerance for execution delays or increased tenant concentration. Financial Maintain financial resilience and stable distributions while managing gearing, liquidity and refinancing exposures prudently. • Prudent appetite; • Low tolerance for refinancing uncertainty, covenant pressure or restricted access to funding. Operational / ESG Ensure reliable operations, asset performance and ESG compliance across all properties. • Moderate appetite for operational variability; • Minimal tolerance for delays in ESG or assetimprovement projects. Reputational Preserve stakeholder confidence and safeguard the REIT’s market position and reputation in the healthcare real estate sector. Very Low appetite for governance lapses, and prolonged DPU stagnation. Market Risk Monitor and respond to macroeconomic, interest rate, regulatory and competitive shifts affecting valuation, funding and tenant demand. • Moderate appetite; • Low tolerance for unmanaged interest-rate volatility or adverse market cycles. Business Partnership/ Strategic Alliances Maintain strong and reliable relationships with tenants, operators and key service providers to support continuity and performance. Low tolerance for partnership disputes, counterparty failures or contractor issues that may disrupt operations or rental stability. Compliance/ Governance/ Legal • Ensure full adherence to regulatory, statutory, Shariah, reporting and Bursa Malaysia requirements. • Uphold high standards of corporate governance, integrity and ethical conduct across all business activities. • Manage legal exposures proactively to avoid disputes, breaches of contract and litigation that may impact the REIT. • Zero tolerance for non-compliance, late submissions, inaccurate disclosures or breaches of regulatory obligations. • Zero tolerance for governance lapses, conflict-of-interest breaches, unethical behaviour or improper business practices. • Low tolerance for contractual nonperformance, legal disputes, or exposures arising from inadequate documentation or oversight. The REIT’s Risk Appetite underpins the Risk Management Framework and is implemented through policies and internal controls that guide daily decision-making, assessments, escalation and compliance. STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL
RkJQdWJsaXNoZXIy NDgzMzc=