27. CAPITAL COMMITMENT Group 2023 2022 RM’000 RM’000 Capital expenditure in respect of: Purchase of intellectual properties: - approved and contracted for 1,000 - 28. CAPITAL AND FINANCIAL RISK MANAGEMENT (a) 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 debtto-equity ratio that complies with debt covenants and regulatory requirements. The debt-to-equity ratios are as follows: Group 2023 2022 RM’000 RM’000 Total loans and borrowings 8,626 12,222 Less: Cash and cash equivalents (11,640) (10,378) Net (cash)/debt (3,014) 1,844 Total equity 153,126 139,250 Net debt-to-equity ratio -* 0.01 * The gearing ratio for the Group is not presented as the Group is net cash position. There was no change in the Group’s approach to capital management during the financial year. (b) Financial risk management The Group has exposures to the following risks from its use of financial instruments: i) Credit risk ii) Liquidity risk iii) Interest rate risk i) Credit risk Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s and the Company’s exposure to credit risk arises principally from its outstanding balances from customers and loans and advances to its subsidiaries. There are no significant changes as compared to prior periods. ANNUAL REPORT 2023 SASBADI HOLDINGS BERHAD 133 Financial Statements (continued)
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