Sasbadi Annual Report 2018

ANNUAL REPORT 2018 FINANCIAL STATEMENTS 133 23. Financial instruments (continued) 23.7 Fair value information (continued) The following table shows the valuation technique used in the determination of fair values within Level 3. Financial instruments not carried at fair value Type Description of valuation technique and inputs used Finance lease liabilities and term loans Discounted cash flows using a rate based on the current market rate of borrowing of the Company at the reporting date. 24. Capital management The Group’s objectives when managing capital are to maintain a strong capital base and safeguard the Group’s ability to continue as 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 requirement. The debt-to-equity ratios are as follows: Group Note 2018 2017 RM’000 RM’000 Total loans and borrowings 12 42,655 36,696 Less: Cash and cash equivalents 10 (6,164) (10,246) Net debt 36,491 26,450 Total equity 156,267 145,383 Net debt-to-equity ratio 0.23 0.18 There was no change in the Group’s approach to capital management during the financial year.