IHH Healthcare Berhad
l
Annual Report 2014
204
Notes to the Financial Statements
36. Financial instruments (continued)
(viii) Fair value of financial instruments (continued)
Level 3 fair value
Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.
Non-derivative financial assets and liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash
flows, discounted at the market rate of interest at the end of the financial year. For finance leases, the market rate of interest is determined
by reference to similar lease agreements.
Interest rates used to determine fair value
The interest rates used to discount estimated cash flows, when applicable, are as follows:
2014
2013
Bank borrowings
1.75% - 12.5% 1.75% - 10.25%
Finance leases
2.40% - 17.17% 0% - 17.17%
37. 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 Group monitors and
maintains an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.
Group
Note
2014
RM’000
2013
RM’000
Loans and borrowings
20
4,269,318
4,461,281
Less: Cash and cash equivalents
17
(2,467,827)
(2,144,827)
Net debt
1,801,491
2,316,454
Total equity
21,313,396
19,922,947
Debt-to-equity ratio
0.08
0.12
There were no changes in the Group’s approach to capital management during the financial year.
The Group is in compliance with all externally imposed capital requirements for the financial years ended 2014 and 2013.
