Fraser & Neave Holdings Bhd Annual Report 2020

217 06 financial statements ANNUAL REPORT 2020 Notes to The Financial Statements (Cont’d.) 30. FINANCIAL INSTRUMENTS (CONTINUED) (G) FAIR VALUE INFORMATION (CONTINUED) Level 3 fair value The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the key unobservable inputs used in the valuation models. Financial instruments not carried at fair value Type Description of valuation technique and inputs used Loans and borrowings Discounted cash flows method using a rate based on the current market rate of borrowing of the respective Group entities at the reporting date. Valuation processes applied by the Group for Level 3 fair value The Group has an established control framework with respect to the measurement of fair values of financial instruments. This includes a finance team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the management. The finance team regularly reviews significant unobservable inputs and valuation adjustments. 31. CAPITAL MANAGEMENT The Group’s objectives when managing capital is 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-to-equity ratio that complies with debt covenants and regulatory requirements. Under the requirement of Bursa Malaysia Practice Note No.17/2005, the Company is required to maintain consolidated shareholders’ equity equal to or not less than 25% of the issued and paid up capital (excluding treasury shares) and such shareholders’ equity is not less than minimum issued and paid-up capital. The Group has complied with this requirement. The Group and the Companymonitor andmaintain a prudent level of total debt to total equity attributable to owners of the Company ratio to optimise shareholders’ value and to ensure compliance with covenants under debt agreements. The debt to equity ratio of the Group is as follows: Group Note 2020 RM’000 2019 RM’000 Total loans and borrowings 17 91,868 123,311 Equity attributable to owners of the Company 2,690,601 2,529,324 Debt to equity ratio 3% 5% 32. CAPITAL AND OTHER COMMITMENTS CAPITAL EXPENDITURE COMMITMENTS Group 2020 RM’000 2019 RM’000 Property, plant and equipment Contracted but not provided for 109,441 206,831