AL-SALAM REIT ANNUAL REPORT 2020

150 AL-SALĀM REIT NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CONT’D) 17. ISLAMIC FINANCING (CONT’D) (c) Sukuk Ijarah (cont’d) T he Sukuk Ijarah Programme has a significant covenant in which the subsidiary, Al-Salām REIT and its subsidiary shall at all times, maintain the following financial covenants: (i) Finance Service Cover Ratio (“FSCR”) at Issuer level of not less than 1.5 times; (ii) FSCR at Al-Salām REIT level of not less than 1.5 times; (iii) Minimum Security Cover Ratio of at least 2.0; and (iii) such other financial covenant(s) as may be determined by the Rating Agency and to be mutually agreed to by ALSREIT Capital Sdn Bhd. T he financing is used to secure the investment properties amounting to RM1,030,760,000 (2019: RM331,108,000) as per disclosed in Note 10. Revolving credit: As of 31 December 2020, the Fund unutilised revolving credit facilities amounting to RM10,000,000 (2019: RM10,000,000) which is granted from a financial institution. The said facility of is secured by investment properties of the subsidiary amounting to RM16,000,000 as mentioned in Note 10. 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 financial statements of cash flows as cash flows from financing activities. 2020 2019 RM RM Group At 1 January Islamic financing 597,532,653 509,527,596 Accrued finance costs 1,594,826 1,441,582 Prepayment for sukuk - (86,463) Total Islamic financing at beginning of year 599,127,479 510,882,715 Repayment of: Finance costs (26,992,357) (31,483,607) Transaction costs (3,928,296) (1,206,570) Net financing cash flows: Acquisition of investment properties 30,973,600 87,026,400 Proceed in Islamic Financing 7,215,000 - 606,395,426 565,218,938 Non-cash changes Accruals of finance costs 26,882,588 31,636,851 Imputed finance cost 1,919,327 2,185,227 At 31 December 635,197,341 599,041,016 The total Islamic financing of the Group as of the end of the reporting period comprised of the following: 2020 2019 RM RM Islamic financing 633,855,901 597,532,653 Accrued finance costs (Note 16) 1,341,440 1,594,826 Prepayment for sukuk - (86,463) 635,197,341 599,041,016