Notes to the Financial Statements PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the financial statements For the year ended 31 December 2023 104 Managing interest rate benchmark reform (IBOR reform) The Group monitors and considers the transition from the IBOR discontinuation by determining that contracts reference IBOR will need to be amended to alternative rates. It provides periodic reports to management of interest rate risk and risks arising from IBOR discontinuation. As at 31 December 2023, the Group has finished the process of amending contractual terms for all of the LIBOR and THBFIX indexed exposures to SOFR and THOR. (b.3.1) Foreign currency risk The Group is exposed to foreign currency fluctuations risk in assets and liabilities and the gross profit (Product to Feed margin - P2F) of the Group that is referenced in foreign currency. Therefore, the Group has a policy in place to manage those risks by emphasizing the natural hedge on assets and liabilities held in foreign currency and the gross profit (P2F) of the Group that is referenced in foreign currency. Moreover, the Group uses derivative hedges to mitigate the residual risk by entering into foreign currency forward contracts in accordance with the framework approved by the Risk Management Committee of the Group which will result in gain (loss) from derivatives which will be offset against the gross profit (P2F) in order to maintain the Group’s net profit at the exchange rate specified in the business plan as follows: - In the event that the Thai Baht appreciates more than the exchange rate in the foreign currency forward contracts, there will be gain on derivative. Meanwhile, the gross profit (P2F) which the Group received in cash will decrease due to the appreciation of the Thai Baht. - On the contrary, in the event that the Thai Baht depreciates more than the exchange rate in foreign currency forward contracts, there will be loss on derivative. Meanwhile, the gross profit (P2F) which the Group received in cash will increase due to the depreciation of the Thai Baht. Overall, the derivative hedge can mitigate the impact from fluctuations in foreign currency to the Group’s performance. Exposure to foreign currency At 31 December Consolidated financial statements Separate financial statements 2023 2022 2023 2022 (in million Baht) USD Financial assets 35,243 20,095 28,940 13,847 Financial liabilities (16,872) (18,673) (80,367) (98,481) Statement of financial position exposure 18,371 1,422 (51,427) (84,634) Net derivatives 24,333 43,881 24,707 45,932 EUR Financial assets 395 671 51,495 47,694 Financial liabilities (268) (403) (39) (51) Statement of financial position exposure 127 268 51,456 47,643 Net derivatives 1,233 411 - - 348
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