Content2011 - PETRONAS Gas Berhad

Notes to the Financial Statements
31 MarCh 2011
32. Financial Instruments (Continued)
189 annUaL report 2011
Fair Value (Continued)
The fair value of fi nancial instruments that are actively traded in organised fi nancial markets is determined by reference to quoted market
bid prices at the close of business on the reporting date.
As at 31 March 2011, the term loan and the CEA are fair valued separately. The fair value of the term loan is derived from the price sourced
from third party and translated at the spot rate at the reporting date. The fair value of the CEA (Note 15) is netted off against the fair value
of the term loan.
33. Capital Management
The Group and the Company defi ne capital as its total equity and debt. The objective of the Group and the Company’s capital management
is to maintain an optimal capital structure and ensuring availability of funds in order to support its business and maximises shareholder value.
As a subsidiary of PETRONAS, the Group’s and the Company’s approach in managing capital is set out in the PETRONAS Group Corporate
Financial Policy.
The Group and the Company monitor and maintain a prudent level of total debt to total asset ratio to optimise shareholder value and to
ensure compliance with covenants under debt and shareholders’ agreements and regulatory requirements if any.
There were no changes in the Group’s and the Company’s approach to capital management during the year.
Under the requirement of Bursa Malaysia Practice Note 17, the Group and the Company are required to maintain consolidated shareholders’
equity to or not less than RM40 million. The Group and the Company have complied with this requirement.
34. Comparative Figures
Amendment to FRS 117, Leases
The adoption of Amendment to FRS 117 has resulted in a change in the accounting policy relating to the classifi cation of leases of land and
did not have material impact on current year statement of comprehensive income.
Prior to the adoption of Amendment to FRS 117, the Group had classifi ed leasehold land that normally has an indefi nite economic life and
title is not expected to pass to the lessee by the end of the lease term as an operating lease. The payment made on entering into or acquiring
a leasehold land is accounted for as prepaid lease payment that is amortised over the lease term in accordance with the pattern of benefi ts
provided.