2018 UEM Edgenta Annual Report

29. BORROWINGS (CONT’D.) (a) Murabahah Term Facility (cont’d.) (v) Cash security equivalent to 20% of the purchase consideration under SPA (whereby the monies set aside for the Standby Letter of Credit (“SBLC”) facility shall be taken into consideration and counted towards this amount upon expiry of the SBLC or upon cancellation of the SBLC; whichever is earlier); (vi) Charge over the Designated Accounts of each customer utilising Facility B; and (vii) Assignment of all financing/advances provided to the Edgenta Singapore and its subsidiaries. In prior year, the Group and the Company have made repayment for the full settlement for Facility A and partial settlement of RM30.2 million (SGD9.8 million) for Facility B. (b) Term loans (i) Secured term loans Secured term loans bear interests which range from 1.80% to 5.48% per annum (2017: 1.90 % to 7.30% per annum). The term loans are secured by: a. Charge over cash and fixed deposit; b. Assignment of rights, title, interest and benefits of the customer under the Concession Agreement in respect of the followings: i. Project Payment Charges ii. Amount payable to the Customer by the Government of Malaysia as a result of early termination iii. Appointment of Substituted Entity c. Assignment of proceeds over revenue and other income generated from the project; d. Assignment over designated accounts; e. Letter of undertaking from a subsidiary to service the monthly obligation of the customer in the event of any shortfall; and f. Corporate guarantee from a subsidiary. (c) Islamic Commercial Papers (“ICPs”) and Islamic Medium Term Notes (“IMTNs”) The Company had established the ICPs and IMTNs under an Islamic Commercial Papers Programme and Islamic Medium Term Notes Programme respectively, which have a combined aggregate limit of up to RM1,000.0 million in nominal value and a sub-limit of RM300.0 million in nominal value for the ICP Programme under the Shariah Principle of Murabahah via a Tawarruq Arrangement. As at 31 December 2018, the Company has issued of the following: a)     RM50.0 million in nominal value of ICPs with a tenure of 12 months issued on 26 April 2018; and b)     RM250.0 million in nominal value of IMTNs with a tenure of 5 years issued on 26 April 2017. The proceeds raised from the ICPs and IMTNs are to be utilised by the Company for its Shariah-compliant general corporate purposes. The effective profit rates for ICPs and IMTNs at the reporting date are 4.37% (2017: 4.33%) and 4.85% (2017: 4.85%) respectively. (d) Syndicated banking facilities (secured) A subsidiary of the Group has Syndicated Banking Facilities which comprise revolving credits, bank guarantees and combined trade facilities. The Syndicated Banking Facilities are secured by a Debenture and a Deed of Assignment of Proceeds dated 27 December 1996 by way of the following: (i) A first fixed charge over all sums paid or may from time to time become due and payable to the subsidiary (“the Proceeds”) by the Government of Malaysia pursuant to the Concession Agreement dated 28 October 1996, all its uncalled capital, its present and future goodwill, patents, trademarks, licenses and concessions and all its present and future plant, equipment and machinery, motor vehicles and furniture and fittings; and (ii) A first floating charge over all the present and future lands undertakings and other properties and assets of the subsidiary both movable and immovable, not otherwise charged in (d)(i) above. NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2018 Management Discussion & Analysis UEM Edgenta Berhad Annual Report 2018 About UEM Edgenta Chairman’s Statement 222