Financial Statements Financial Statements Press Metal Aluminium Holdings Berhad 280 281 Integrated Annual Report 2023 Notes to the Financial Statements Notes to the Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D) 28.4 Credit risk (cont’d) Inter-company receivables and loans and advances (cont’d) Exposure to credit risk, credit quality and collateral As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position. Loans and advances provided are not secured by any collateral or supported by any other credit enhancements. Recognition and measurement of impairment loss Generally, the Group and the Company consider receivables and loans and advances to subsidiaries and associates to have low credit risk. The Group and the Company assume that there is a significant increase in credit risk when a subsidiary’s and associate’s financial position deteriorates significantly. As the Group and the Company are able to determine the timing of payments of the subsidiaries’ and associates’ loans and advances when they are payable, the Group and the Company consider the loans and advances to be in default when the subsidiaries and associates are not able to pay when demanded. The Group and the Company consider a subsidiary’s and associate’s loan or advance to be credit impaired when: • The subsidiary or associate is unlikely to repay its loan or advance to the Group or to the Company in full; or • The subsidiary or associate is continuously loss making and is having a deficit shareholders’ fund. The Group and the Company determine the probability of default for these loans and advances individually using internal information available. As at the end of the reporting period, there was no indication that the receivables and loans and advances to subsidiaries and associates are not recoverable. As these amounts are considered to have low credit risk, the Group and the Company are of the view that the loss allowance is not material and hence, they are not provided for. 28.5 Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings. The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. 28. FINANCIAL INSTRUMENTS (CONT’D) 28.5 Liquidity risk (cont’d) Maturity analysis The table below summarises the maturity profile of the Group’s financial liabilities as at the end of the reporting period based on undiscounted contractual payments: Group Carrying amount RM’000 Contractual interest rate/ coupon/ discount rate % Contractual cash flows RM’000 Under 1 year RM’000 1 - 2 years RM’000 2 - 5 years RM’000 More than 5 years RM’000 2023 Non-derivative financial liabilities Trade and other payables 1,248,913 - 1,248,913 1,248,913 - - - Bank loans 1,386,884 * 1,534,370 664,825 387,576 443,174 38,795 Islamic Medium-Term Notes 2,800,000 2.69 - 4.45 3,201,015 649,255 799,255 1,167,455 585,050 Revolving credits 184,043 3.70 - 3.95 186,334 186,334 - - - Bankers’ acceptances 19,493 4.15 - 5.35 20,302 20,302 - - - Bank overdrafts 8,366 2.90 - 3.95 8,366 8,366 - - - Lease liabilities 229,067 2.44 - 6.01 243,691 28,601 23,515 53,245 138,330 5,876,766 6,442,991 2,806,596 1,210,346 1,663,874 762,175 Derivatives Commodity swaps and options 90,950 - 90,950 15,659 39,577 35,714 - Forward exchange contracts (gross settled): Outflow 202,650 - 16,733,556 4,286,968 3,011,261 7,183,968 2,251,359 Inflow - - (16,530,906) (4,211,929) (2,950,745) (7,111,102) (2,257,130) Cross currency swaps (gross settled): Outflow 95,607 - 2,480,607 586,430 738,948 822,474 332,755 Inflow - - (2,385,000) (550,000) (700,000) (800,000) (335,000) 6,265,973 6,832,198 2,933,724 1,349,387 1,794,928 754,159 * Represents lenders’ cost of funds ranging from a margin of +3.43% to +5.65% and Secured Overnight Financing Rate (“SOFR”) ranging from margin of +1.10% to +3.00% per annum.
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