Kimlun Corporation Berhad Annual Report 2019

Annual Report 2019 Kimlun Corporation Berhad NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2019 (cont’d) 154 35. Capital management The gearing ratios are as follows: Note 2019 2018 RM RM Loans and borrowings 23 406,608,807 273,153,771 Less: Cash and bank balances 22 (64,940,265) (35,569,427) Net debt 341,668,542 237,584,344 Total equity 720,528,877 664,796,263 Capital and net debt 1,062,197,419 902,380,607 Gearing ratio 32.2% 26.3% 36. Segment information (i) Construction (ii) (iii) Investment holding (iv) Property development The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2019 and 2018. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, loans and borrowings less cash and bank balances whereas total capital comprises equity attributable to owners of the Company. Group For management purposes, the Group is organised into business units based on their products and services, and has four reportable operating segments as follows: Manufacturing and trading of construction materials and provision of quarry services Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.