NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2023 CONT’D 25. BORROWINGS (Cont’d) (a) Borrowings are classified as financial liabilities and measured at amortised cost. (b) Financial guarantee contracts issued are initially measured at fair value. Subsequently, they are measured at higher of: (i) the amount of the loss allowance; and (ii) the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance to the principles of MFRS 15, Revenue from Contracts with Customers. (c) Term loans of the Group and of the Company are: (i) secured by legal charge and negative pledge on the long term leasehold land and buildings of the Group and the Company as disclosed in Notes 12 and 13; and (ii) guaranteed by way of corporate guarantee by the Group and the Company. (d) Revolving credit of the Group and of the Company are: (i) secured by legal charge and negative pledge on the long term leasehold land and buildings of the Group and the Company as disclosed in Notes 12 and 13; (ii) secured by first party charge over deposits with licensed banks as disclosed in Note 22; and (iii) guaranteed by way of corporate guarantee by two (2) of its subsidiaries, e-pay (M) Sdn. Bhd. and Paysys (M) Sdn. Bhd. (e) The fair values of the Group’s and of the Company’s borrowings 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 amount of the borrowings are reasonable approximation of fair value as they are floating rate instruments that are repriced to market interest rate on or near the end of reporting period. (f) The weighted average effective interest rates per annum of borrowings as at the end of each reporting period are as follows: Group Company 2023 2022 2023 2022 % % % % Term loans 5.35 4.78 4.60 4.35 Banker’s acceptance - 3.15 - - Revolving credit 4.70 3.59 4.70 3.59 147 ANNUAL REPORT 2023
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