Chemical Company of Malaysia Berhad Annual Report 2019

16. Loans and borrowings (continued) 16.1Unsecured term loans (continued) iii) CCM Chemicals Sdn. Bhd. (“CCMC”), a subsidiary of the Company, obtained a RM50million, 5 years unsecured term loan at the floating rate of approximately 4.70% per annum (2018: approximately 4.79% per annum). At 20 December 2019, CCMC had exercised the abridgement option to extend the tenure of the term loan from October 2020 to October 2022. The significant covenants for the unsecured term loan are as follows: (a) CCMC shall maintain a minimumConsolidated Net Worth of RM80million during the tenure of the facility. (b) CCMC and its subsidiaries’ Consolidated Total Debt to Consolidated Net Worth ratio shall not at all times exceed 1.5 times. (c) CCMC’s Profit Coverage Ratio shall not be less than 2.0 times. (d) CCMC’s Debt Service Ratio shall not at all times be less than 1.25 times. iv) During the financial year, CCMC obtained a RM40 million, 5 years unsecured term loan at the floating rate of approximately 5.10% per annum which matures on 28 February 2024. The significant covenants for the unsecured term loan are as follows: (a) CCMC’s Gearing Ratio shall not exceed 1.5 times. Gearing is defined as Total Debts over Tangible Net Worth. (b) CCMC shall maintain a minimum Finance Service Cover Ratio (“FSCR”) of 1.25 times. FSCR is defined as Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”)/(Profit plus Current Portion of Long Term Debt). (c) CCMC shall maintain a minimumConsolidated Net Worth of RM100million during the tenure of the facility. v) CCM Polymers Sdn. Bhd. (“CCMP”), a subsidiary of the Company, obtained a RM10.4million, 5 years unsecured term loan at the floating rate of approximately 4.08% per annum (2018: approximately 5.05% per annum) which matures on 25 May 2023. The significant covenants for the unsecured term loan are as follows: (a) CCMP’s Total Debt to Net Worth shall not exceed 1.5 times. (b) CCMP’s Finance Service Cover Ratio (“FSCR”) of not less than 1.2 times. 16.2Unsecured revolving credit and trade facilities The Company has utilised the revolving credit and trade facilities from various banks and subject to fulfilment of the following covenants: i) Letter of Comfort from Chemical Company of Malaysia Berhad. ii) The Company shall maintain a Gearing Ratio of not more than 1.5 times. iii) The Company shall maintain Debt Service Coverage Ratio of at least 2.0 times Earnings Before Interest, Income Tax and Depreciation during the tenure of the facility. BUSINESS OVERVIEW OTHER INFORMATION GOVERNANCE STRUCTURE 173 ANNUAL REPORT 2019 FINANCIAL STATEMENTS