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108 I 2020 ANNUAL REPORT I financial reports

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020 (CONTINuED)

4 financial risK ManaGeMent oBJectiVes anD policies (continued)

(d) capital risk management
The Company’s objectives when managing capital are:
• to safeguard the Company’s ability to continue as a going concern;
• to maximise returns for shareholders; and
• to maintain an optimal capital structure which minimises the cost of capital while maintaining sufficient liquidity.
The Company monitors capital on the basis of gearing ratio. This ratio is calculated as total borrowings divided by
total capital. The capital structure of the Company consists of borrowings and total equity.
2020 2019
rM’000 rM’000
Total borrowings 799,807 1,381,913

Total equity 2,168,381 2,011,343
Total borrowings 799,807 1,381,913
Total capital 2,968,188 3,393,256

Gearing ratio 27% 41%

The borrowings of the Company are subject to the banks’ covenants, which include debt service cover ratio, liability to
asset ratio, current ratio and net debt to earnings before interest, tax, depreciation, and amortisation (EBITDA) ratio,
which the Company has complied with.