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Annual Report 2014 | S P SETIA BERHAD GROUP | 201

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 October 2014

V. FINANCIAL STATEMENTS

45. FAIRVALUE OF FINANCIAL INSTRUMENTS (CONT’D)

(b) Determination of fair value (cont’d)

Group

Company

Carrying

Carrying

amount

Fair value

amount

Fair value

RM‘000

RM‘000

RM‘000

RM‘000

2013

Restated

Financial assets:

Amounts owing by subsidiary companies

-

-

1,886,452

#

Amount owing by a former joint venture partner

14,380

#

-

-

Financial liabilities:

Redeemable cumulative preference shares

74,831

#

-

-

Fixed rate long term borrowings

400,000

#

400,000

#

Floating rate long term borrowings

2,936,264

*

300,000

*

* The carrying amounts are reasonable approximation of fair values because they are floating rate instruments which are repriced

to market interest rates.

#

The carrying amounts are reasonable approximation of fair value.

Comparative fair value information is not presented by levels by virtue of the exemption given in FRS 13.

The carrying amounts of all other financial assets and liabilities of the Group and of the Company at the reporting date approximated

or were at their fair values. The fair values of the financial assets and financial liabilities above are determined using discounted cash

flow method. The most significant input being the discount rate that reflects the credit risk of the counterparties.

46. CAPITAL MANAGEMENT

The primary objectives of the Group’s and the Company’s capital management are to ensure that it maintains a strong capital base and

healthy capital ratios in order to support its existing business operations and enable future development of the businesses as well as

maximise shareholders’ value.

The capital structure of the Group and the Company consists of equity attributable to the shareholders of the Company (i.e. share capital,

reserve and retained earnings), Perpetual bond and total debts, which include borrowings.

Management reviews and manages the capital structure regularly and makes adjustments to address changes in the economic

environment and risk characteristics inherent in its business operations. These initiatives may include equity capital raising exercises and

adjustments to the amount of dividends distributed to shareholders. No changes were made in the objectives, policies and processes

during the years ended 31 October 2014 and 31 October 2013.