AL-SALAM REIT ANNUAL REPORT 2019

AL-SALĀM REIT • 145 ANNUAL REPORT 2019 For The Financial Year Ended 31 December 2019 (Cont’d) Weighted Average On demand effective Carrying Contractual or within Within profit rate amount cash flows 1 year 2 to 5 years % RM RM RM RM The Fund 31 December 2018 Non-profit bearing financial liabilities: Other payables and accrued expenses 24,712,732 24,712,732 10,738,408 13,974,324 Amount owing to related companies 1,080,530 1,080,530 1,080,530 - Profit bearing financial liabilities: Variable profit rate instruments - Islamic financing - Non-current 5.47 348,592,979 358,298,706 1,618,104 356,680,602 Amount owing to a subsidiary 5.69 159,317,928 172,174,350 4,694,675 167,479,675 533,704,169 556,266,318 18,131,717 538,134,601 (c) Financing Rate Risk Management Financing rate risk is the risk that the fair value or future cash flows of the Group’s and the Fund’s financial instruments will fluctuate because of changes in the market financing rates. The Group and the Fund manage their financing rate exposure by maintaining matching their cash flows from rental income and fixed rate profit bearing deposits with the Group’s and the Fund’s variable rate profit bearing borrowings. The Group and the Fund place cash deposits on a short-term basis and therefore allows the Group and the Fund to respond to significant changes of financing rate promptly. Financing rate sensitivity analysis The sensitivity analysis below has been determined based on the exposure to financing rates on the Group’s and the Fund’s variable rate profit bearing borrowings. The analysis is prepared assuming the amount of variable rate profit bearing borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 25 basis point increase or decrease is used for the analysis and this represents management’s assessment of reasonable possible change in financing rate. If financing rates had been 25 basis point higher/lower and all other variables were held constant, the Group’s and the Fund’s net profit/total comprehensive income for the year would decrease/increase by RM1,493,832 and RM1,088,720 (2018: RM1,273,819 and RM871,482) respectively. The assumed movement in basis points for financing rate sensitivity analysis is based on the currently observable market environment. 23. SEGMENT REPORTING Segment information is presented in respect of the Group’s and the Fund’s business segments based on the nature of the industry of the Group’s and Fund’s investment properties, which reflect the Group’s and the Fund’s internal reporting structure that are regularly reviewed by the Group’s and the Fund’s chief operating decision maker for the purposes of allocating resources to the segment and assessing its performance. For management purposes, the Group and the Fund are organised into the following operating divisions: • Retail outlets • Office buildings • Food and beverage (“F&B”) properties comprising restaurant and non-restaurant outlets • Others comprising Fund level operations No information on geographical areas is presented as the Group and the Fund operate solely in Malaysia. Notes To The Financial Statements