Fraser & Neave Holdings Bhd Annual Report 2021

30. FINANCIAL INSTRUMENTS #CONTINUED$ #G$ FAIR VALUE INFORMATION #CONTINUED$ Level 2 fair value Derivatives The fair value of a forward exchange contract is estimated by taking the di!erence of the future cash flows arising from the derivative financial instrument, each discounted by their respective risk-free rate (based on government bonds) to the measurement date based on residual maturity of the foreign exchange contract. 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 (2020: no transfer in either directions). 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 Company monitor and maintain 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 2021 RM’000 2020 RM’000 Total loans and borrowings 17 1,000 91,868 Equity attributable to owners of the Company 2,818,965 2,690,601 Debt to equity ratio <1% 3% 32. CAPITAL AND OTHER COMMITMENTS CAPITAL EXPENDITURE COMMITMENTS Group 2021 RM’000 2020 RM’000 Property, plant and equipment Contracted but not provided for 175,991 109,441 240 NOTES TO THE F INANCIAL STATEMENTS