FINANCIAL STATEMENTS 88 Notes to the annual financial statements (continued) for the year ended 30 June 2021 20. Financial risk management objectives and policies (continued) Fair value The fair value of all current financial assets and liabilities held by the Group approximate the individual carrying values of those assets and liabilities. Non-current interest bearing loans and borrowings held by the Group approximates its carrying value (except as disclosed in Note 18). The Group can use various methods in estimating the fair value of a financial instrument. The methods comprise: Level 1 – the fair value is calculated using quoted prices in active markets. Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data. The Group uses foreign exchange forward contracts ("FEFC") to manage some of its transaction exposure. The FEFC's are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally from one to 24 months. They are classified as fair value through profit or loss, with Level 2 methods used to estimate the fair value. At 30 June 2021, the Group had not booked any FEFC market to market transactions (2020: nil) The FEFC's are valued using market observable inputs, applying a forward pricing model using present value calculations. The model incorporates foreign exchange spot and forward rates and the credit quality of counterparties. 21. Issued capital All figures are in A$000’s Note 2021 2020 Issued and paid capital Ordinary share capital 226,955,362 (2020: 226,555,362) fully paid ordinary shares 21(a) 267,765 227,765 Preference share capital Nil (2020: 400,000) fully paid non-redeemable 9.53% per annum cumulative preference shares 21(a), 21(b) - 40,000 Total contributed equity 267,765 267,765 21(a) - Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the amounts of paid shares held. On the 10 December 2020 all 400,000 preference shares held by the parent company, Aveng Australia Holdings Pty Ltd were converted into ordinary shares, by way of variation of the rights attached to the shares so that the rights attached to the preference shares are the same in all respects as the rights attached to the ordinary shares without cancelling any shares or issuing any new ordinary shares. 21(b) - Preference shares entitled the holder to participate in dividends prior to ordinary shareholders. They were entitled to an amount of 9.53% of the face value of shares per annum. The declaration of any dividend was at the discretion of the Company. If dividends were not paid, or were not paid in full, any unpaid amounts accumulated to a maximum value of the investment. Voting and all other rights were the same as ordinary shareholders. The cumulative value of dividends not paid on preference shares (in whole dollars) was $27,404,624 (2020: $25,712,723). Subsequent to the conversion of the preference shares to ordinary capital the dividends were forfeited. When managing capital, management's objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders.
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