AL-SALAM REIT ANNUAL REPORT 2018

AL-SALĀM REIT ANNUAL REPORT 2018 145 20. SIGNIFICANT RELATED PARTY TRANSACTIONS For the purposes of these have inancial statements, related companies are considered to be related to the Group and the Fund if the Group and the Fund have the ability, directly or indirectly, to control the party or exercise signiicant inluence over the party in making inancial and operating decisions, or vice versa, or where the Group and the Fund and the party are subject to common control or common signiicant inluence. Related parties may be individuals or other entities. Signiicant related party transactions other than those separately disclosed elsewhere in the inancial statements are as follows: The Group The Fund 2018 2018 2017 RM RM RM Rental income received/receivable from related companies 34,539,941 34,950,722 27,860,572 Other property management fees charged by related companies of the Manager (including in other operating expenses) 7,634,987 7,634,987 4,487,125 Finance cost paid/payable to a subsidiary - 3,273,583 - The related party transactions described above were entered into in the normal course of business and are based on negotiated and mutually agreed terms. Amount owing to a subsidiary represents unsecured advances received from the proceeds raised from Islamic inancing by the subsidiary of RM160,934,617. The inance costs and repayment terms of the unsecured advances mirror the inance costs and repayment terms of the Islamic inancing of Sukuk Ijarah raised by the said subsidiary as disclosed in Note 17. Also included in the amount owing to a subsidiary are the accrued proit from the cash reserves totaling RM1,616,689 that are presented as net amount as there is a currently enforceable legal right to ofset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. 21. FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. The carrying amount of the various inancial assets and inancial liabilities relected in the statements of inancial position approximate their fair values other than as disclosed below: Carrying amount Fair value RM RM The Group 2018 Financial liability at amortised cost Islamic inancing - non-current 509,527,596 480,815,308