Serba Dinamik Annual Report 2016

158 SERBA DINAMIK HOLDINGS BERHAD Company No.1167905 P NOTES TO THE FINANCIAL STATEMENTS (Cont’d) 24. FINANCIAL INSTRUMENTS (CONT’D) 24.4 Fair value information (Cont’d) Transfers between Level 1 and Level 2 fair values There has been no transfer between Level 1 and Level 2 fair values during the financial period. Level 3 fair value Level 3 fair value is estimated using observable inputs for the financial assets and liabilities. The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the key unobservable inputs used in the valuation models. Financial instruments not carried at fair value Description of valuation Type technique and input used Term loans, finance lease Discounted cash flow using a rate liabilities and redeemable based on the current market rate of convertible preference share borrowing of the respective Group entities at the reporting date. 25. 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 Group’s strategy, was to maintain the debt-to-equity ratio not exceeding 2.00 times. The debt-to-equity ratios at 31 December 2016, were as follows: Group 2016 RM Total loans and borrowings (Note 14) 639,661,014 Less: Cash and cash equivalents (Note 12) (187,352,968) Less: Other investments (Note 6) (52,445,755) 399,862,291