FINANCIAL STATEMENTS (continued) 109 18. LOANS AND BORROWINGS Group 2022 2021 RM’000 RM’000 Non-current Hire purchase 38 66 Term loans - secured 1,321 2,149 1,359 2,215 Current Hire purchase 24 40 Term loans - secured 404 4,451 Bank overdrafts - secured 6,024 8,776 Bankers’ acceptances - secured 4,411 2,009 10,863 15,276 12,222 17,491 (a) Loans and borrowings are classified as financial liabilities measured at amortised cost. (b) Loans and borrowings are denominated in Ringgit Malaysia. (c) The term loans of the Group are secured by charges over the land and buildings (Note 5), corporate guarantees by the Company and letter of negative pledged. (d) The bank overdrafts of the Group are secured by charges over the land and buildings (Note 5), pledged deposits (Note 16), corporate guarantees by the Company and letter of negative pledge. (e) The bankers’ acceptances are secured by charges over the land and buildings (Note 5), corporate guarantees by the Company and letter of negative pledge. (f) Fair value of the Group’s hire purchase is categorised as Level 3 in the fair value hierarchy, which is estimated by discounting expected future cash flows at current market interest rates available for similar financial instruments. There were no transfers between levels in the hierarchy during the financial year. Hire purchase that is not carried at fair value and together with its carrying amount, is as follows: 2022 2021 Group Carrying amount Fair value Carrying amount Fair value RM’000 RM’000 RM’000 RM’000 Hire purchase 62 70 106 115 The carrying amounts of short-term borrowings reasonably approximate their fair values due to the relatively short-term nature of these financial instruments. The carrying amount of term loans is reasonable approximation of fair value as they are floating rate instruments that are re-priced to market interest rate on or near to the reporting period. 109 ANNUAL REPORT 2022
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