Serba Dinamik Annual Report 2016

140 SERBA DINAMIK HOLDINGS BERHAD Company No.1167905 P NOTES TO THE FINANCIAL STATEMENTS (Cont’d) 14. LOANS AND BORROWINGS (CONT’D) (i) Security The bank overdrafts, bankers’ acceptances and revolving credits facilities of the Group are secured by the following: (a) legal charges over on leasehold land and certain buildings of the Group (see Note 3.2). (b) secured by the facility agreement and term deposits (see Note 6 and Note 12). The term loans of the Group are secured by the following: (a) General and supplemental facility agreement. (b) First and second legal charges over leasehold land and certain buildings of the Group (see Note 3.2). (c) Legal charges over plant and machinery as well as tools and equipment of the Group (see Note 3.2). (d) Legal charges over assets belong to the Directors of the Company. (e) Corporate guarantee from the Company. Finance lease liabilities of the Group are secured on the respective finance lease assets (see Note 3.2). The revolving credits (Islamic) of the Group are secured by the following:- (a) secured by term and fixed deposits (see Notes 6 and 12); (b) corporate guarantee from the Company. (ii) Significant covenants on loans and borrowings The Group is required to maintain a gearing ratio not exceeding 2.00 times in respect of the banking facilities granted by five licensed banks to the Group. The total outstanding borrowings of the Group with the said banks as at 31 December 2016 are RM315,045,975. The Group has not breached the covenants. In addition, a subsidiary of the Company is required to maintain a ratio between the amount due from subsidiaries and associate as well as amount owing to subsidiaries and associate of not more than 1.0 time for the Islamic Treasury Facilities secured during the period which has been complied with. The Islamic term loans, bank overdrafts, and revolving credits facilities of RM7,874,447, RM5,074,265 and RM529,168,221 respectively are Islamic facilities under Bai’ Inah contract. (iii) Finance lease liabilities Finance lease liabilities are payable as follows: 2016 Minimum lease payments Interest Principal RM RM RM Group Less than one year 3,403,225 624,871 2,778,354 Between one and two years 3,364,348 434,010 2,930,338 Between two and five years 4,171,602 276,316 3,895,286 More than five years 148,228 16,138 132,090 11,087,403 1,351,335 9,736,068