Financial Statements Financial Statements Press Metal Aluminium Holdings Berhad 300 301 Integrated Annual Report 2023 Notes to the Financial Statements Notes to the Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D) 28.8 Fair value information (cont’d) Company Fair value of financial instruments carried at fair value Fair value of financial instruments not carried at fair value Total fair value RM’000 Carrying amount RM’000 Level 1 RM’000 Level 2 RM’000 Level 3 RM’000 Total RM’000 Level 1 RM’000 Level 2 RM’000 Level 3 RM’000 Total RM’000 2023 Financial assets Loans to a subsidiary - - - - - - 1,459,776 1,459,776 1,459,776 1,459,776 Derivatives - 2,036 - 2,036 - - - - 2,036 2,036 - 2,036 - 2,036 - - 1,459,776 1,459,776 1,461,812 1,461,812 Financial liabilities Derivatives - (71,245) - (71,245) - - - - (71,245) (71,245) IMTN - - - - - - (2,815,006) (2,815,006) (2,815,006) (2,800,000) Bank loans - - - - - - (839,567) (839,567) (839,567) (839,567) - (71,245) - (71,245) - - (3,654,573) (3,654,573) (3,725,818) (3,710,812) 2022 Financial assets Loans to a subsidiary - - - - - - 1,444,545 1,444,545 1,444,545 1,444,545 Amounts due from subsidiaries - - - - - - 88 88 88 88 Derivatives - 18,664 - 18,664 - - - - 18,664 18,664 - 18,664 - 18,664 - - 1,444,633 1,444,633 1,463,297 1,463,297 Financial liabilities Derivatives - (8,722) - (8,722) - - - - (8,722) (8,722) IMTN - - - - - - (2,300,000) (2,300,000) (2,300,000) (2,300,000) Bank loans - - - - - - (1,229,412) (1,229,412) (1,229,412) (1,229,412) - (8,722) - (8,722) - - (3,529,412) (3,529,412) (3,538,134) (3,538,134) 28. FINANCIAL INSTRUMENTS (CONT’D) 28.8 Fair value information (cont’d) Level 2 fair value Derivatives The fair value of derivatives is determined by reference to statements provided by the respective financial institutions with which these contracts were entered into. Transfers between Level 1 and Level 2 fair values There has been no transfer between Level 1 and Level 2 fair values during the financial year (2022: no transfer in either direction). Level 3 fair value Valuation process applied by the Group for Level 3 fair value For financial instruments not carried at fair value, the Group has applied discounted cash flows valuation technique using a rate based on the current market rate of borrowings of the respective Group entities at the reporting date in the determination of fair values within Level 3. The Group’s treasury team has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values. 29. CAPITAL MANAGEMENT The Group’s objectives when managing capital are to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements. The debt-to-equity ratios at 31 December 2023 and 31 December 2022 were as follows: Note Group 2023 RM’000 2022 RM’000 Loans and borrowings 16 4,398,786 4,854,170 Lease liabilities 229,067 239,143 Less: Cash and bank balances 14 (1,228,008) (604,002) Net debt 3,399,845 4,489,311 Total equity 8,396,253 8,005,350 Debt-to-equity ratio 0.40 0.56 There was no change in the Group’s approach to capital management during the financial year. The Group has not breached any of the loan covenants disclosed in Note 16.
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