EXCEL FORCE MSC BERHAD Annual Report 2017

112 31. 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. There were changes were made in the objectives, policies or processes during the financial years ended 31 December 2017 and 31 December 2016. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group’s net debt includes loan and borrowing, trade and other payables, less cash and cash equivalents. The Group’s total capital represents equity attributable to the owners of the parent. The gearing ratio at the end of the reporting period are as follows: Group Company 2017 2016 2017 2016 RM RM RM RM Term loan 4,240,002 5,221,110 4,240,002 5,221,110 Trade and other payables 3,346,675 2,291,183 2,633,037 1,636,358 7,586,677 7,512,293 6,873,039 6,857,468 Less: Cash and cash equivalents (21,541,617) (23,328,962) (21,369,345) (23,215,348) Net debt/(asset) (13,954,940) (15,816,669) (14,496,306) (16,357,880) Total capital 46,571,961 45,420,354 46,867,516 45,815,294 Net gearing ratio * * * * * Net gearing ratio is not applicable as the Group and the Company are in a net asset position. Notes To The Financial Statements 31 December 2017 (cont’d)