28. BANK BORROWINGS (CONTINUED) The Group bank borrowings are as follows: a) Term loan I The Group entered into a banking facility amounting to $18,500,000 on 28 March 2018, which was revised to $17,000,000 on 9 July 2018 and $50,937,000 on 3 November 2021. The facility is a specific advance facility meant for financing the Group’s building construction project, which the limit is subject to a step up/down schedule, fully repayable by 31 July 2024. The loan carries an interest at 1.15% per annum over the Bank’s prevailing Cost of Funds. The loan is secured by: (i) a charge over the receivables of construction contract, including charge on non-checking account for the specific property development project; and (ii) the corporate guarantee provided by the Company. As at the end of the reporting period, the outstanding borrowing amounted to $Nil (2023: $16,000,000) and the interest rate is 5.03 % (2023: 5.05%) per annum. The term loan I was fully repaid during the financial year. b) Term loan II The Group entered into a banking facility amounting to $8,600,000 on 5 November 2018, which is to finance the purchase of two properties. The loan carries an interest at 3.32% for the first and second year of the loan, 2.95% for the third year of loan and 6.25% thereafter plus the bank cost of borrowings. The loan is secured by a first legal mortgage over the two buildings under Group’s property, plant and equipment (Note 10). The term loan is repayable over 132 monthly instalments comprising of the principal amount and monthly interest. The monthly repayment commences on 17 June 2019 and will continue until 17 April 2030. On 11 May 2022, the banking facility was revised with conversion of interest rate on the outstanding borrowing amounts of $7,019,000. The revised loan carries an interest at 0.88% over the applicable 3-month Compound Singapore Overnight Rate Average (“SORA”) for the first year of conversion, 1.08% over the applicable 3-month Compounded SORA for the second year of conversion and 2.00% the applicable 3-month Compounded SORA for the third year of conversion and thereafter. As at the end of the reporting period, the outstanding borrowing amounts to $5,147,000 (2023: $5,911,000), comprising of both current and non-current loan amount of $794,000 (2023: $771,000) and $4,353,000 (2023: $5,140,000) respectively. The Group entered into an additional banking facility amounting to $3,000,000 on 9 April 2020, which can be drawn down based on the Group’s financing requirements. The loan carries an interest at 2.75% plus the bank cost of borrowings. The loan is secured by a corporate guarantee provided by the Company. The term loan is repayable over 60 monthly instalments comprising of the principal amount and monthly interest. The monthly repayment commences on 31 October 2020 and will continue until 30 September 2025. As at the end of reporting period, the outstanding borrowings amounted to $629,000 (2023: $1,295,000), comprising of both current and non-current loan amount of $629,000 (2023: $666,000) and $Nil (2023: $629,000) respectively. The Group entered into two additional banking facilities amounting to $6,000,000 and $10,000,000 on 31 January 2023 (revised on 6 July 2023) and 6 July 2023, which can be drawn down based on the Group’s financing requirements. The facilities are revolving short term loan meant for financing the building construction projects, which the limits are subjected to a step up/down schedule and are repayable by 31 August 2025 and 1 February 2026. The loans carry an interest of 1.5% per annum over the Bank’s Cost of Funds as determined by the Bank on the day of transaction. The loans are secured by: (i) a charge over the receivables of construction contract, including charge on non-checking account for the specific property development projects; and (ii) the corporate guarantee provided by the Company. As at the end of the reporting period, the outstanding borrowing amounts to $8,000,000 (2023: $2,000,000). 118 KEONG HONG HOLDINGS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2024
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