BIMB Integrated Annual Report 2017

23. SUKUK LIABILITIES GROUP COMPANY 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Sukuk liabilities 1,279,512 1,227,494 1,279,512 1,227,494 Subordinated Sukuk Murabahah 956,350 654,257 – – 2,235,862 1,881,751 1,279,512 1,227,494 The Sukuk liabilities comprise the following: (1) The 10-year Islamic securities of RM1.66 billion (2016: RM1.66 billion) in nominal value issued by the Company on 12 December 2013; and (2) Three (3) Tranches of the Subordinated Sukuk Murabahah amounting to RM1.0 billion (2016: RM700 million) issued by Bank Islam Malaysia Berhad which is as follows: (a) On 22 April 2015, the Bank issued the first tranche of RM300 million in nominal value of Subordinated Sukuk Murabahah which are due on 22 April 2025, with optional redemption on 22 April 2020 or any periodic payment date thereafter. The Sukuk bears a profit rate of 5.75% per annum payable semi-annually in arrears. (b) On 15 December 2015, the Bank issued the second tranche of RM400 million which are due on 15 December 2025, with optional redemption on 15 December 2020 or any periodic payment date thereafter. The Sukuk bears a profit rate of 5.50% per annum payable semi-annually in arrears. (c) On 13 November 2017, the Bank issued the third tranche of RM300 million which are due on 12 November 2027, with optional redemption on 12 December 2022 or any periodic payment date thereafter. The Sukuk bears a profit rate of 5.08% per annum payable semi-annually in arrears. The Subordinated Sukuk Murabahah qualifies as Tier II capital for the computation of the regulatory capital of the Bank in accordance with the Capital Adequacy Framework (Capital Components) for Islamic Banks issued by BNM. Reconciliation of movement of Sukuk Liabilities to cash flows arising from financing activities is as follows: NET CHANGES FROM FINANCING CASH FLOWS FINANCE FINANCE AT COST COST FOR AT 1.1.2017 ISSUANCE PAYABLE TOTAL THE YEAR 31.12.2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Group Sukuk Liabilities 1,227,494 – (24,831) (24,831) 76,849 1,279,512 Sukuk Murabahah 654,257 300,000 (36,453) 263,547 38,546 956,350 1,881,751 300,000 (61,284) 238,716 115,395 2,235,862 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 224 BIMB HOLDINGS BERHAD Integrated Annual Report 2017