Al-`Aqar Healthcare REIT Annual Report 2020

AL-`AQAR HEALTHCARE REIT Annual Report 2020 146 18. Islamic financing (cont’d) Murabahah Tawarruq Term Financing-i (cont’d) The Murabahah Tawarruq is payable over a period of 24 months from the date of first disbursement with bullet repayment of the principal sum on the 24th month. The Murabahah 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 4.40%. There is no specific financial covenant associated with the Murabahah Tawarruq. The Murabahah Tawarruq had been fully repaid during the current financial year. Commodity Murabahah Term Financing-I On 27 December 2019, the Fund obtained floating rate borrowing facility (“Commodity Murabahah-I”) amounting to RM80,000,000 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-I 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-I bears an effective profit rate of 1.25% per annum above the bank’s COF. The average effective profit rate for the Commodity Murabahah-I during the year is 3.74%. The transaction costs incurred for the Commodity Murabahah-I was RM660,000. The Commodity Murabahah-I was secured against the investment properties as disclosed in Note 10 amounting to RM122,000,000 (2019: RM119,500,000). Commodity Murabahah Term Financing-II On 30 November 2020, the Fund obtained floating rate borrowing facility (“Commodity Murabahah-II”) amounting to RM29,994,050 from OCBC Al-Amin Bank Berhad to refinance the Ambank’s facility. The Commodity Murabahah-II 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-II bears an effective profit rate of 1.25% per annum above the bank’s Cost of Funds (“COF”). The average effective profit rate for the Commodity Murabahah-II during the year is 3.35%. The transaction costs incurred for the Commodity Murabahah-II was RM403,078. The Commodity Murabahah-II was secured against the investment properties as disclosed in Note 10 amounting to RM79,900,000 (2019: NIL). Changes in liabilities arising from financing activities: At At 1 January Charged to 31 December 2020 Cash flows profit or loss Reclassification 2020 Group RM RM RM RM RM Non-current IMTN 575,000,000 - - (575,000,000) - Commodity Murabahah-I 80,000,000 - - - 80,000,000 Commodity Murabahah-II - 29,994,050 - - 29,994,050 655,000,000 29,994,050 - (575,000,000) 109,994,050 Less: Transaction costs on borrowings (1,360,942) (404,744) 358,891 482,435 (924,360) 653,639,058 29,589,306 358,891 (574,517,565) 109,069,690 Current IMTN - - - 575,000,000 575,000,000 Murabahah Tawarruq 29,900,000 (29,900,000) - - - Less: Transaction costs on borrowings (103,474) - 103,474 (482,435) (482,435) 683,435,584 (310,694) 462,365 - 683,587,255 Notes to the Financial Statements For the Year Ended 31 December 2020