Dagang NeXchange Berhad Annual Report 2018

30. FINANCIAL INSTRUMENTS (CONTINUED) 30.7 Fair value information (continued) Level 2 fair value Non-derivative financial 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 reporting period. Transfers between Level 1 and Level 2 fair values There has been no transfer between Level 1 and 2 fair values during the financial year (2017: no transfer in either directions). 31. 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 Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements. The debt-to-equity ratio at the end of the reporting period are as follows: Group 2018 2017 RM’000 RM’000 Total loans and borrowings 47,575 20,000 Less: Cash and cash equivalents (Page 104) (19,670) (44,693) Net debt/(cash) 27,905 (24,693) Total equity 441,510 424,357 Debt-to-equity ratio 0.06 Not applicable There were no changes in the Group’s approach to capital management during the financial year. The debt-to-equity ratio of the Group at the end of the previous reporting period was not presented as the cash and cash equivalents exceeded the total loans and borrowings. 175 Annual Report 2018 Notes to the Financial Statements (CONTINUED) FINANCIAL STATEMENTS