Financial Statements Financial Statements Press Metal Aluminium Holdings Berhad 242 243 Integrated Annual Report 2023 Notes to the Financial Statements Notes to the Financial Statements 8. INVESTMENTS IN ASSOCIATES Note Group Company 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 Investments in: - Quoted shares 8.1 102,870 44,026 102,870 44,026 - Irredeemable convertible unsecured loan stocks (“ICULS”) together with free detachable warrants 8.1 - 58,844 - 58,844 - Unquoted shares 1,261,837 1,137,261 1,229,397 1,104,821 Share of post-acquisition reserves 471,683 303,465 - - Group’s share of net assets 1,836,390 1,543,596 1,332,267 1,207,691 Level 1 fair value of quoted instruments: - Quoted shares 1,049,223 947,091 1,049,223 947,091 - ICULS - 376,074 - 376,074 8.1 ICULS together with free detachable warrants 2018 In June 2018, the Company subscribed in full its 27.72% entitlement on the Rights Issue of ICULS together with free detachable warrants issued by PMB Technology Berhad (“PMBT”) for a total cash consideration of RM58,844,000. The salient features of the ICULS together with free detachable warrants were as follows: i) The ICULS would be maturing in 2023 and the coupon rate for the ICULS was 3% per annum; ii) The ICULS had a nominal value of RM2.74 each and was convertible to ordinary shares of PMBT at a price of RM2.74 per share; iii) The ICULS had a conversion ratio of 1:1, convertible any time from the date of issuance up to the maturity date. Any ICULS not converted by maturity date would be mandatorily converted to ordinary shares of PMBT upon maturity; and iv) The exercise price of the warrants was RM3.01, exercisable from the date of issuance up to market day falling immediately before the fifth anniversary of the date of the issuance of the warrants. The Directors had assessed that the ICULS together with free detachable warrants form part of the investment in PMBT as they gave current access to the returns associated with the associate. 2022 In July 2022, 53,689,895 warrants were exercised by the Company at the price of RM0.60. This had resulted in an increase of the investments in PMBT by RM32,214,000. 2023 During the current financial year, all 108,969,010 ICULS were converted by the Company to ordinary shares at a price of RM2.74 per share. There are no changes to the equity investment in PMBT. 8. INVESTMENTS IN ASSOCIATES (CONT’D) 8.2 Security At 31 December 2023, 3,856,033 shares (2022: 3,452,783 shares) of PT Bintan Alumina Indonesia (“PT BAI”) with cost of investment of RM1,229,397,000 (2022: RM1,104,822,000) were pledged as security to secure bank facilities granted to the Company (see Note 16). 8.3 Material accounting policy information Investments in associates are measured in the Company’s statement of financial position at cost less any impairment losses. Details of the material associates are as follows: Name of entity Principal place of Business/ Country of Incorporation Nature of the relationship Effective ownership interest and voting interest 2023 % 2022 % PMB Technology Berhad (“PMBT”) Malaysia Trading of aluminium products with the Group 24 22 Shandong Sunstone & PMB Carbon Ltd., Co. (“Sunstone”) China Manufacturing of prebaked carbon anodes for consumption of the Group 20 20 PT Bintan Alumina Indonesia (“PT BAI”) Indonesia Manufacturing of alumina for consumption of the Group 25 25
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