SCC Holdings Berhad Annual Report 2019

notes to the financial statement 31 december 2019 (cont’d) 97 SCC Holdings Berhad | Annual Report 2019 32. Capital Management The Group and the Company manage their capital to ensure that entities within the Group and the Company will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholders’ value. To achieve this objective, the Group and the Company 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. The Group and the Company monitor capital using a gearing ratio. The Group’s and the Company’s policy is to maintain a prudent level of gearing ratio that complies with debt covenants and regulatory requirements. The gearing ratios at end of the reporting period are as follows: Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Debts Bank borrowings - 127 - - - 127 - - Less: Cash and bank balances (5,764) (6,769) (429) (678) Excess of cash and bank balances (5,764) (6,642) (429) (678) Total Equity 43,036 42,435 26,808 27,469 Gearing ratio * * * * * Gearing ratio not applicable for financial years ended 31 December 2018 and 2019 as the cash and bank balances of the Group and of the Company are sufficient to settle the outstanding debts. There were no changes in the Group’s and the Company’s approach to capital management during the financial year. 33. Subsequent Event Effect of outbreak of coronavirus pandemic The Directors of the Company have closely monitored the development of the outbreak of coronavirus pandemic (“COVID-19”) infection in Malaysia that may affect the business performance, financial performance and financial position of the Group and of the Company mainly due to travel and movement restriction and other precautionary measures imposed by relevant local authorities that affected the Group and the Company business operations. As at the date of this report, the financial impact of the COVID-19 outbreak to the Group and to the Company cannot be reasonably estimated due to the inherent unpredictable nature and rapid development relating to COVID-19, the extent of the impact depends on the on-going precautionary measures introduced by each country to address this pandemic and the durations of the pandemic. As such, the Directors of the Company will continue to closely monitor the situations and respond proactively to mitigate the impact on the Group’s and the Company’s financial performance and financial position. 34. Date of Authorisation for Issue The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 28 May 2020.