Excel Force MSC Berhad Annual Report 2016

EXCEL FORCE MSC BERHAD ANNUAL REPORT 2016 98 Notes to the Financial Statements 31 December 2016 (cont’d) 31. FINANCIAL INSTRUMENTS (a) Capital management The primary objective of the Group’s capital management is to ensure that entities of the Group would be able to continue as going concerns while maximising the return to shareholders through the optimisation of the debt and equity ratio. The overall strategy of the Group remains unchanged from that in the previous financial year. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the financial years ended 31 December 2016 and 31 December 2015. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances. Capital represents equity attributable to the owners of the parent. Group Company 2016 2015 2016 2015 RM RM RM RM Borrowings 5,221,110 6,202,218 5,221,110 6,202,218 Trade and other payables 2,291,183 3,577,383 1,636,358 2,213,815 Total liabilities 7,512,293 9,779,601 6,857,468 8,416,033 Less: Cash and bank balances (Note 14) (23,328,962) (19,701,826) (23,215,348) (18,583,193) Net asset (15,816,669) (9,922,225) (16,357,880) (10,167,160) Total equity 45,420,354 44,446,490 45,815,294 44,033,021 Gearing ratio * * * * * It is not applicable due to net asset position. The Company has complied with Practice Note No. 17/2005 of the Bursa Malaysia Securities for the financial year ended 31 December 2016. (b) Categories of financial instruments Group Loans and receivables Fair value through profit or loss Total 2016 RM RM RM Financial assets Trade and other receivables, net of prepayments 3,646,822 - 3,646,822 Cash and bank balances 7,446,233 - 7,446,233 Short term funds - 15,882,729 15,882,729 11,093,055 15,882,729 26,975,784