Page 197 - S P Setia Annual Report 2016

 

 

 

 

 

Page 197 - S P Setia Annual Report 2016
P. 197

S P Setia Berhad Group                                                                                195
          Annual Report 2016




                                                                               Notes To The Financial Statements

                                                                                  For The Financial Year Ended 31 December 2016

          41.   FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D.)
              (b)   Determination of fair value (cont’d.)


                                                                        Group                      Company
                                                             Carrying amount     Fair value  Carrying amount  Fair value
                                                                   RM’000         RM’000        RM’000        RM’000
                   2015                                                           Level 2                      Level 2
                   Financial assets:
                   Amounts owing by subsidiary companies                 -             -       1,392,759           #

                   Financial liabilities:
                   Redeemable cumulative preference shares          53,770         48,677            -             -
                   Fixed rate long term borrowings                 200,000       184,006       200,000        184,006
                   Floating rate long term borrowings             3,214,000            *        269,705            *

                   *    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.

                   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.



          42.   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, RCPS-i, 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 financial year ended 31 December 2016 and period ended 31 December 2015.
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