(continued) Fair value of financial instruments (continued) (i) Policy on transfer between levels The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. There were no transfers between levels during the financial year. (ii) Level 1 fair value Level 1 fair value is derived from quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. (iii) Level 2 fair value Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the financial assets or liabilities, either directly or indirectly. Derivative financial instruments The fair value is estimated by the difference betweenthe contractual forward price and the current forward price for the residual maturity of the contract. Non-derivative financial instruments Fair value, which is determined for disclosure purpose, 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 reporting period. (iv) Level 3 fair value Level 3 fair values for the financial assets and liabilities are estimated using unobservable inputs. (v) Interest rates used to determine fair value The interest rates used to discount estimated cash flows, when applicable, ranging between 0.1% to 8.0% (2022: 0.1% to 8.0%). Although the Group and the Company believe that their estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. The favourable and unfavourable effects of using reasonably possible alternative assumptions have been calculated by recalibrating the model values using expected cash flows and risk-adjusted discount rates based on the probability weighted average of the Group’s and of the Company’s ranges of possible outcomes. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL