188 KEYFIELD INTERNATIONAL BERHAD 202001038989 (1395310-M) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2024 (cont’d) 35. FINANCIAL INSTRUMENTS (CONT’D) 35.2 CAPITAL RISK MANAGEMENT The Group and the Company manage their capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its 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 manage their capital based on debt-to-equity ratio that complies with debt covenants and regulatory, if any. The debt-to-equity ratio is calculated as net debt divided by total equity. The Group and the Company include within net debt, other payables with interest-bearing, loans and borrowings from financial institutions less cash and cash equivalents. The debt-to-equity ratio of the Group and the Company at the end of the reporting period are as follows:- The Group The Company 2024 2023 2024 2023 RM’000 RM’000 RM’000 RM’000 CRNCPS - 143,010 - 143,010 Other payables (interest-bearing) - 112,609 - - Lease liabilities 31,736 14,643 - - Term loans - 8,811 - - Islamic medium term notes 196,655 - 196,655 - 228,391 279,073 196,655 143,010 Less: Fixed deposits with licensed banks (5,271) (4,241) - - Less: Cash and bank balances (321,590) (68,540) (205,936) (22,235) Net debts (98,470) 206,292 (9,281) 120,775 Total equity 714,945 294,392 412,818 183,212 Debt-to-equity ratio * 0.70 * 0.66 Note:- * Not applicable as the Group’s and the Company's cash and cash equivalents exceed its borrowings. There were no changes in the approach to capital management during the financial year.
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