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Datasonic Group Berhad
(Company No. 809759-X)
144
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
(Continued)
46. FINANCIAL INSTRUMENTS (CONT’D)
46.2 CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities within the Group will be able to maintain
an optimal capital structure so as to support its businesses and maximise shareholders value.
To achieve this objective, the Group may make adjustments to the capital structure in view of
changes in economic conditions, such as adjusting the amount of dividend payment, returning
of capital to shareholders or issuing new shares.
TheGroupmanages its capital based on debt-to-equity ratio that complies with debt covenants
and regulatory requirements, if any. The debt-to-equity ratio is calculated as total borrowings
divided by total equity. The Group includes within total borrowings, loans and borrowings from
financial institutions. Capital includes equity attributable to the owners of the parent and non-
controlling interest. The debt-to-equity ratio of the Group at the end of the financial year/period
is as follows:-
Group
2016
2015
RM’000
RM’000
Trade financing (Note 28)
40,719
28,813
Hire purchase payables (Note 24)
596
108
Term financing (Note 23)
13,061
15,814
Term loans (Note 22)
65,718
89,624
Bank overdraft (Note 28)
5,000
–
Total borrowings
125,094
134,359
Total equity
245,250
222,859
Debt-to-equity ratio
0.51
0.60
There was no change in the Group’s approach to capital management during the financial
year.
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required
to maintain a consolidated shareholders’ equity (total equity attributable to owners of the
Company) of more than 25% of the issued and paid-up share capital (excluding treasury shares)
and such shareholders’ equity is not less than RM40 million. The Company has complied with
this requirement.