Al-`Aqar Healthcare REIT Annual Report 2019

Al-`Aqar Healthcare REIT 06 FINANCIAL STATEMENT 149 Tawarruq bears an effective profit rate of 1.50% per annum above the bank’s Cost of Funds (“COF”). The average effective profit rate for the Murabahah Tawarruq during the year is 5.54%. There is no specific financial covenant associated with the Murabahah Tawarruq. The Murabahah Tawarruq will be due in May 2020. The Manager is in the midst of undertaking steps to refinance the said facility as explained in Note 23(b). Commodity Murabahah Term Financing-i On 27 December 2019, Al-`Aqar obtained floating rate borrowing facility (“Commodity Murabahah”) amounting to RM80.0 million from OCBC Al-Amin Bank Berhad to finance the acquisition of new hospital with purchase consideration of RM78.0 million and to pay related cost and expenses during the acquisition. The Commodity Murabahah is payable over a period of 60 months from the date of first disbursement with bullet repayment of the principal sum on the 60th month. The Commodity Murabahah bears an effective profit rate of 1.25% per annum above the bank’s COF. The average effective profit rate for the Commodity Murabahah during the year is 4.70%. The transaction costs incurred for the Commodity Murabahah was RM660,000. The Commodity Murabahah was secured against the investment properties as disclosed in Note 11 amounting to RM119,500,000 (2018: RMNIL). Reconciliation of liabilities arising from financing activities The table below details the changes in the Group’s and the Fund’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s and the Fund’s statements of cash flows as cash flows from financing activities. The Group The Fund 2019 2018 2019 2018 RM RM RM RM Islamic Financing Islamic Financing 603,705,130 573,580,634 29,683,646 - Accrued financing costs on Sukuk Ijarah Programme (Note 15) 3,871,840 7,017,006 - - Total Islamic Financing at beginning of year 607,576,970 580,597,640 29,683,646 - Total financing cash inflows 80,000,000 29,900,000 80,000,000 29,900,000 Total financing cash outflows (31,854,287) (34,503,989) (2,267,418) (375,480) 655,722,683 575,993,651 107,416,228 29,524,520 Non-cash changes Finance costs on Islamic Financing 31,933,936 30,129,128 1,607,653 145,182 Notes To The Financial Statements For The Financial Year Ended 31 December 2019 (Continued) 17. ISLAMIC FINANCING (CONTINUED) Murabahah Tawarruq Term Financing-i (Continued)