Al-`Aqar Healthcare REIT Annual Report 2019

RISK RISK DESCRIPTION MITIGATION PLAN Tenant Concentration Risk Risk of being dependent on a single tenant. Termination or non-renewal of tenancy by the single tenant will negatively impact the performance of the properties. The Manager has entered into a long-term lease Agreement (15 + 15 years & renewal of tenancy every 3 years) to ensure performance each property is guaranteed. Uninsured Liabilities Risk of uninsured liabilities range from the after-effects of a disaster such as terrorism to cyber-security risks which potentially could lead to losses. A revision on takaful plan is carried out on an annual basis to ensure sufficient coverage. The triple net lease agreements with the tenants ensures that the risk of insufficient liabilities are transferred to the tenants. Cyber Security Risks Cyber security breaches, for example, can damage a company’s reputation, which is difficult to insure against. A Group-Wide Disaster Recovery and Business Continuity Framework is currently drafted and tested by stages to ensure threats of cyber security breaches are mitigated. Compliance Risk Risk that Al-`Aqar fails to comply with applicable laws and regulations. The Manager has a designated compliance officer who is responsible for ensuring that all relevant laws, guidelines, and regulations are duly complied with. Human Capital Risk Risk that the Manager fails to attract and retain competent staff force to manage its portfolio and to execute its strategies for sustainable growth. The Manager promotes work- life balance with current working hour as well as offering a competitive remuneration package to the employees. Al-`Aqar Healthcare REIT 03 STRATEGIC PERFORMANCE 49