Serba Dinamik Annual Report 2019

311 30. CAPITAL MANAGEMENT The Group’s objectives when managing capital are to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements. The Group’s strategy is to maintain the debt-to-equity ratio not exceeding 2.00 times. The debt-to-equity ratios at 31 December 2019 and as at 31 December 2018, were as follows: Group 2019 2018 RM’000 RM’000 Total loans and borrowings (Note 18) 3,339,527 1,711,456 Finance Lease liabilities (Note 17.1) 11,899 - Less:Cash and cash equivalents (Note 14) ( 1,306,590) ( 760,791) Less:Other investments (Note 7) ( 51,172) ( 69,952) Net debt 1,993,664 880,713 =========== =========== Total equity 2,439,885 2,092,265 =========== =========== Net debt-to-equity ratios 0.82 0.42 =========== =========== There was no change in the Group’s approach to capital management during the financial year. The Group is also required to maintain a maximum debt-to-equity ratio of 2.00 to comply with bank covenants, failing which, the banks may call an event of default. The Group has not breached this covenant (see Note 18). 31. RELATED PARTIES Identity of related parties For the purposes of the financial statements, parties are considered to be related to the Group or the Company if the Group or the Company has the ability, directly or indirectly, to control or jointly control the parties or exercise significant influence over the parties in making financial and operating decisions, or vice versa, or where the Group or the Company and the parties are subject to common control. Related party may be individuals or other entities. Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group or the Company either directly or indirectly and entity that provides key management personnel services to the Group. Key management personnel include all the Directors of the Group or the Company, and certain members of senior management of the Group or the Company. The Group has related party relationships with its significant investors, subsidiaries, associate and key management personnel. N O T E S T O T H E F I N A N C I A L S TAT E M E N T S