My EG Services Berhad Annual Report 2020

MY E.G. SERVICES BERHAD Regisration No. 200001003034 (505639-K) 222 NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2020 (CONT’D) 47. FINANCIAL INSTRUMENTS (CONT’D) 47.2 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 2020 2019 RM’000 RM’000 Lease liabilities 5,457 9,696 Term loans 128,010 137,749 Revolving credit 21,100 21,100 Block discounting 16,408 17,152 Trade payables 72,404 102,237 Other payables and accruals 26,428 30,051 Amount owing to an associate 33 - 269,840 317,985 Less: Fixed deposits with licensed banks (12,829) (12,439) Less: Cash and bank balances (221,784) (63,781) Net debt 35,227 241,765 Total equity 1,142,823 707,995 Debt-to-equity ratio 0.03 0.34 There was no change in the Group’s approach to capital management during the financial year.