GHL System Berhad Annual Report 2017

GHL SYSTEMS BERHAD 116 NOTES TO THE FINANCIAL STATEMENTS 31 December 2017 CONT’D 23. BORROWINGS (cont’d) Group Company 2017 2016 2017 2016 Note RM RM RM RM Total borrowings Term loans 15,038,684 17,212,773 - - Hire purchase creditors 24 2,647,555 4,410,951 296,639 102,369 Bankers’ acceptance 12,000,000 - - - Islamic facility 4,500,000 16,500,000 - - 34,186,239 38,123,724 296,639 102,369 (a) Borrowings are classified as other financial liabilities, and measured at amortised cost using the effective interest method. (b) Term loans of the Group are: (i) secured by legal charge and negative pledge on the long term leasehold land and buildings of the Group as disclosed in Note 11 to the financial statements; and (ii) guaranteed by way of corporate guarantee by the Group. (c) Bankers’ acceptance and Islamic facility of the Group are: (i) secured by first party charge over structured investment and deposits with licensed banks as disclosed in Notes 16 and 20 to the financial statements; and (ii) guaranteed by way of corporate guarantee by the Group. (d) The fair value of term loans, hire purchase creditors, bankers’ acceptance and Islamic facility are estimated by discounting expected future cash flows at current market interest rates available for similar financial instruments and of the same remaining maturities. The carrying values of these financial instruments approximate their fair values. The fair values of borrowings are categorised into Level 2 of the fair value hierarchy. There were no transfers between Level 1 and Level 2 fair value measurement during the financial year. (e) The weighted average effective interest rates of borrowings as at the end of each reporting period are as follows: Group Company 2017 2016 2017 2016 RM RM RM RM Term loans 5.43% 6.31% - - Hire purchase creditors 5.73% 5.63% 4.29% 4.45% Bankers’ acceptance 4.55% - - - Islamic facility 5.80% 5.80% - -