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GHL Systems Berhad
(293040-D)
Annual report 2015
Notes to the Financial Statements
31 December 2015 (continued)
35. FINANCIAL INSTRUMENTS
(a) Capital management
The primary objective of the capital management of the Group is to maintain a strong capital base
and safeguard the ability of the Group to continue as a going concern whilst maintaining an optimal
capital structure, so as to maximise shareholders value. The management reviews the capital structure
by considering the cost of capital and the risks associated with the capital. The overall strategy of the
Group remains unchanged from that in the previous financial year.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividend paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Total capital managed at Group level, which comprises shareholders’ funds, cash and cash equivalents
and bank borrowings.
The gearing ratios are as follows:
Group
2015
2014
RM
RM
Total borrowings
46,512,803 40,465,796
Less: Cash and cash equivalents
(52,304,729) (39,441,558)
(Net cash)/ Net debt
(5,791,926)
1,024,238
Total equity
236,940,345 222,658,360
Gearing ratio
-
>0.01
Pursuant to the requirements of Practice Note No. 17/2005 of the Bursa Malaysia Securities, the Group
is required to maintain a consolidated shareholders’ equity equal to or not less than the twenty-five
percent (25%) of the issued and paid-up capital (excluding treasury shares) and such shareholders’
equity is not less than RM40 million. The Company has complied with this requirement for the financial
year ended 31 December 2015.
The Group is not subject to any other externally imposed capital requirements.