ENRA Group Berhad | Annual Report 2022 155 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2022 36. FINANCIAL INSTRUMENTS (a) Capital management The primary objective of the capital management of the Group and the Company is to ensure that the entities of the Group and the Company would be able to continue as going concerns while maximising the returns to shareholders through the optimisation of the debt and equity balance. The overall strategy of the Group and the Company remains unchanged from that in the financial year ended 31 March 2021. The Group and the Company manage its capital structure and makes adjustments to it, in light of changes in the economic conditions. In order to maintain or adjust the capital structure, the Group and the Company may from time to time adjust the dividend payout 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 March 2021 and 31 March 2022. The Group and the Company monitor capital using a gearing ratio, which is total external borrowings and divided by total equity. The policy of the Group and the Company is to keep the gearing ratio within manageable levels. At the end of the reporting period, the Group’s and the Company’s gearing ratio is 0.03 times (2021: 0.54 times) and nil (2021: 0.06 times) respectively. Pursuant to the requirements of Practice Note No. 17/2005 of the Bursa Malaysia Securities, the Group is required to maintain a consolidated shareholders’ equity of more than 25% of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not less than RM40.00 million. The Group has complied with this requirement for the financial year ended 31 March 2021. (b) Determination of fair value The methods and assumptions used to estimate fair values of financial assets and financial liabilities are as follows: (i) Financial instruments that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair values. The carrying amounts of financial assets and liabilities, such as trade and other receivables, trade and other payables and borrowings are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period. The carrying amounts of the current position of borrowings are reasonable approximations of fair values due to the insignificant impact of discounting. (ii) Hire-purchase and lease creditors and other borrowings The fair values of these financial instruments are estimated by future contractual cash flows at current market rate for similar financial instruments and of the same remaining maturities at the end of the reporting period.
RkJQdWJsaXNoZXIy NDgzMzc=