237 / 284
FINANCIAL STATEMENTS
Axiata Group Berhad | Annual Report 2016
235
39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(d) Capital risk management
The primary objective of the Group’s capital risk management is to ensure that it maintains a strong credit rating and healthy capital ratios in
order to support its business and maximise shareholder’s value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the
capital structure, the Group may or may not make dividend payments to shareholders, return capital to shareholders or issue new shares or
other instruments.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratios. This ratio is calculated as total borrowings
over total equity. Total borrowings including non-current and current borrowings as shown in the consolidated statement of financial position.
Total equity is calculated as ‘equity’ in the consolidated statement of financial position.
Note
2016
RM’000
2015
RM’000
Borrowings
16
22,259,881
16,392,386
Total equity
28,620,204
25,724,344
Gearing ratio
0.78
0.64
The Group’s capital management strategy was to obtain and maintain an investment grade credit rating.
(e) Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
•
Quoted prices (unadjusted) in active markets for identified assets or liabilities (Level 1).
•
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly [that is, as prices] or
indirectly [that is, derived from prices] (Level 2).
•
Inputs for the asset or liability that are not based on observable market data [that is unobservable inputs] (Level 3).
The Group measured the financial instruments based on published price quotations (Level 1) and market approach valuation technique (Level 2)
with inputs of valuation technique such as interest rates and yield curves observable at commonly quoted intervals; implied volatilities; and
credit spreads that are observable direct or indirectly as at reporting date.
There were no transfers between Level 1 and Level 2 during the financial year.