GHL System Berhad Annual Report 2019

A N N U A L R E P O R T 2 0 1 9 153 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 CONT’D 25. BORROWINGS (cont’d) (d) The fair value of term loans, hire purchase creditors, 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 other than hire purchase creditors approximate their fair values. The fair value of hire purchase creditors are as follows: 2018 Carrying amount Fair value RM RM Group Hire purchase creditors 10,065,345 9,927,647 Company Hire purchase creditors 229,981 225,634 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 2019 2018 2019 2018 RM RM RM RM Term loans 6.26% 5.93% - - Hire purchase creditors - 4.86% - 3.96% Islamic facility 5.80% 5.80% - - (f) At the end of the reporting period, the interest rate profile of the borrowings are as follows: Group Company 2019 2018 2019 2018 RM RM RM RM Fixed rates 19,726,919 25,947,825 - 229,981 Floating rates 6,477,300 8,720,036 - - The exposure to interest rate risk of the Group and of the Company is not significant and therefore, sensitivity analysis is not presented.