200 SECTION 07 AL-`AQAR HEALTHCARE REIT KEY RISK PROFILES The consolidated analysis of Al-`Aqar’s risk landscape highlights several key themes that shape the REIT’s overall risk posture and priorities for Board oversight. • Top 3 risks (Tenant Concentration, Strategic Execution, Valuation Risk) represent the highest strategic vulnerability and require Board-level focus. • Financial risks (refinancing, capital raising) remain sensitive to market conditions and must be monitored closely in 2025–2026. • Operational risks are well controlled but require ongoing capex planning. • ESG and climate impacts are growing and will increasingly influence valuation, financing, and regulatory expectations. • Compliance and Integrity controls are strong and stable across the REIT The table below presents the top ten risks for Al-`Aqar, summarising their heatmap positions, residual risk levels and the effectiveness of current mitigation measures based on the latest risk assessment. # Risk Risk Rating Mitigation Effectiveness Effectiveness Summary 1 Tenant Concentration (KPJ dependency) Long-term leases help, but structural concentration risk persists. 2 Strategic Execution Risk (Acquisitions/Disposals) Governance exists but delays continue due to external factors 3 Asset Valuation & Revaluation Risk Strong valuation controls but cannot offset market-driven cap-rate shifts. 4 Capital Raising & Refinancing Constraints Strong banking relationships; equity market conditions remain challenging. 5 Healthcare Infrastructure Reliability Preventive maintenance effective; ageing assets require capex upgrades. 6 ESG Project Execution (Solar PV, Chillers) Plans in place but delays due to approvals, funding and ROI uncertainty. 7 Climate & Environmental Risk Baseline climate compliance in place; adaptation measures developing. 8 Cybersecurity & Technology Risk Basic IT controls effective; no advanced cybersecurity monitoring yet. 9 Regulatory & Compliance Risk Good compliance discipline and oversight; minor residual exposure remains. 10 Integrity / ABAC Risk Zero-tolerance policy, controls, training and monitoring highly effective. During the year, the risk profile demonstrated dynamic movement caused by shifts in market conditions, financing environment, tenant concentration levels, asset valuation volatility, and execution progress of major strategic initiatives. Quarterly assessments informed updated mitigation actions and resource prioritisation. STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL Legend: Moderate Low High Very High Risk Rating: Mitigation Effectiveness: Low Moderate Strong Moderate– Strong Very Strong
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