112 EXCEL FORCE MSC BERHAD Notes to the Financial Statements (cont’d) 35. CAPITAL MANAGEMENT The Group’s and the Company’s objectives when managing capital are to safeguard the Group’s and the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group and the Company monitors capital using a gearing ratio, which is net debt divided by total equity. The Group includes within net debt, trade and other payables and lease liabilities less cash and cash equivalents. 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 the end of the reporting period are as follows: Group Company 2021 2020 2021 2020 RM RM RM RM Trade and other payables 5,041,177 5,663,750 4,821,931 5,503,368 Lease liabilities 672,117 1,005,317 672,117 1,005,317 Total debts 5,713,294 6,669,067 5,494,048 6,508,685 Less: Cash and cash equivalents (32,356,372) (22,853,401) (30,151,875) (22,125,361) Excess fund (26,643,078) (16,184,334) (24,657,827) (15,616,676) Total equity 101,670,049 92,859,490 101,429,927 92,332,068 Gearing ratio (times) * * * * * The gearing ratio is not applicable as the Group and the Company have sufficient cash and cash equivalents to settle the liabilities at the end of the reporting period. There were no changes in the Group’s and the Company’s approach to capital management during the financial year. 36. CAPITAL COMMITMENT Group and Company 2021 2020 RM RM Authorised and contracted for: - Property, plant and equipment 3,527,258 3,527,258
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