NOTES TO THE FINANCIAL STATEMENTS Cont’d 29. Financial instruments cont’d 29.8 Fair value information cont’d Level 2 fair value Derivatives The fair value of derivatives is determined by reference to statements provided by the respective financial institutions with which these contracts were entered into. Transfers between Level 1 and Level 2 fair values There has been no transfer between Level 1 and Level 2 fair values during the financial year (2021: no transfer in either direction). Level 3 fair value Valuation process applied by the Group for Level 3 fair value For financial instruments not carried at fair value, the Group has applied discounted cash flows valuation technique using a rate based on the current market rate of borrowings of the respective Group entities at the reporting date in the determination of fair values within Level 3. The Group’s treasury team has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values. 30. Capital management The Group’s objectives when managing capital are to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and are determined to maintain an optimal debt-toequity ratio that complies with debt covenants and regulatory requirements. The debt-to-equity ratios at 31 December 2022 and 31 December 2021 were as follows: Group Note 2022 2021 RM’000 RM’000 Loans and borrowings 17 4,854,170 6,156,207 Lease liabilities 239,143 214,000 Less: Cash and bank balances 15 (604,002) (458,501) Net debt 4,489,311 5,911,706 Total equity 8,005,350 4,919,853 Debt-to-equity ratio 0.56 1.20 There was no change in the Group’s approach to capital management during the financial year. The Group has not breached any of the loan covenants disclosed in Note 17. PRESS METAL ALUMINIUM HOLDINGS BERHAD 307
RkJQdWJsaXNoZXIy NDgzMzc=