My EG Services Berhad Annual Report 2019

ANNUAL REPORT 2019 191 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2019 (CONT’D) FINANCIAL STATEMENTS 51. FINANCIAL INSTRUMENTS (CONT’D) 51.1 FINANCIAL RISK MANAGEMENT POLICIES (cont’d) (c) Liquidity Risk (cont’d) Maturity Analysis (cont’d) The contractual undiscounted cash flows represent the outstanding credit facilities of the subsidiaries at the end of the reporting period. The financial guarantees have not been recognised in the financial statements since their fair value on initial recognition were not material. 51.2 CAPITAL RISK MANAGEMENT The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholders’ value. To achieve this objective, the Group 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 manages its 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 includes within net debt, loans and borrowings from financial institutions less cash and cash equivalents. Capital includes equity attributable to the owners of the parent and non-controlling interest. The debt-to- equity ratio of the Group at the end of the reporting period was as follows:- The Group 31.12.2019 30.9.2018 RM’000 RM’000 Lease liabilities 9,696 - Hire purchase and finance lease payables - 3,812 Term loans 137,749 107,524 Revolving credit 21,100 15,760 Block discounting 17,152 - Trade payables 102,237 159,510 Other payables and accruals 30,051 27,085 317,985 313,691 Less: Fixed deposits with licensed banks (12,439) (10,066) Less: Cash and bank balances (63,781) (100,164) Net debt 241,765 203,461 Total equity 707,995 563,902 Debt-to-equity ratio 0.34 0.36 There was no change in the Group’s approach to capital management during the financial period.