AL-SALAM REIT ANNUAL REPORT 2017

152 AL-SALĀM REIT ANNUAL REPORT 2017 16. ISLAMIC FINANCING 2017 2016 RM RM Current: Commodity Murabahah Revolving Credit-i 3,100,000 - Non-current: Commodity Murabahah Term Financing-i 350,000,000 350,000,000` Transaction costs (2,301,033) (3,195,045) 347,698,967 346,804,955 Total Islamic Financing 350,798,967 346,804,955 Current Islamic financing – current facility is a Commodity Murabahah Revolving Credit-I (“CMRC-i”) dated 14 June 2017 where the facility amount given up to the aggregate principal limit of RM10 million from RHB Islamic Bank Berhad to part finance the general working capital requirements of the Fund. The effective rate for the CMRC-i will be based on Costs of Funds (“COF”) + 1.50% per annum. Non-current Islamic financing – non-current facility is a Commodity Murabahah Term Financing-i (“CMTF-i”) dated 14 April 2015 amounting to RM350.0 million from RHB Islamic Bank Berhad and Maybank Islamic Berhad (collectively “the Banks”) to part finance the acquisition of the investment properties of the Fund in 2015. The nominal value of the CMTF-i comprised Tranche 1 and Tranche 2, amounting to RM136.04 million and RM213.96 million, respectively. The CMTF-i profit is payable over a period of 60 months from the date of first disbursement with full repayment of principal sum on the 60th month. The effective profit rate for the CMTF-i will be based on COF + 1.35% per annum for the first 16 months, COF + 1.40% per annum for the next 8 months and COF + 1.50% per annum for the remaining duration of the CMTF-i. The COF is based on each respective Banks’ COF. The average effective profit rate for the CMTF-i is 4.99% (2016: 5.11%). The total transaction costs of RM4,470,060 incurred in 2015 were debited against the amount of the Islamic financing facility on drawdown date comprising, amongst others, processing and stamping fees, legal advisory fees and other establishment fees. The Islamic financing facility is secured against investment properties totaling RM715,200,000 (2016: RM712,970,000) as mentioned in Note 11. NOTES TO THE FINANCIAL STATEMENTS - CONT’D