244 SECTION 09 AL-`AQAR HEALTHCARE REIT NOTES TO THE FINANCIAL STATEMENTS 31 December 2025 2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES 2.1 Basis of preparation The financial statements of the Group and of the Fund have been prepared in accordance with the applicable provisions of the Second Restated Trust Deed dated 25 November 2019, Supplemental Deed to the Second Restated Trust Deed dated 29 December 2022, MFRS Accounting Standards as issued by Malaysia Accouting Standards Board and IFRS Accounting Standards. These financial statements also comply with the applicable disclosure provisions of the Listing Requirements of Bursa Malaysia Securities. The financial statements of the Group and the Fund are prepared under the historical cost basis except for investment properties and applicable financial instruments that have been measured at their fair values. The financial statements are presented in Ringgit Malaysia (“RM”) except when otherwise stated. As of 31 December 2025, the current liabilities of the Group has exceeded the current assets by RM437,468,822. The net current liabilities position are mainly derived from borrowings of RM280,000,000 and RM359,994,050 which will be due in May 2026 and September 2026. The Manager believes that the Group will be able to meet its short‑term obligations as and when they fall due on the basis that the Group has initiated the process to extend the maturities of these borrowings and has identified several refinancing plans to be undertaken thereafter. As at the date of the financial statements, the Group has requested a one‑year extension for the borrowings and is assessing the available refinancing options offered by financial institutions. Taking into consideration the viability of these options and the progress made to date, the Manager is confident that the extension and subsequent refinancing can be completed as planned. Accordingly, the Manager is of the opinion that the going concern basis used in the preparation of the financial statements remains appropriate. 2.2 Changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year, except in the current period, the Group and the Fund adopted the following new and amended MFRS Accounting Standards mandatory for annual financial periods beginning on or after 1 January 2025: Description Effective for annual periods beginning on or after Amendments to MFRS 121: Lack of Exchangeability 1 January 2025 The adoption of the above new and amended MFRS did not have any significant financial impact to the Company. The adoption of the above new and amended MFRS Accounting Standards did not have any significant financial impact to the Group and the Fund.
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