343 ANNUAL REPORT 2022 ACCOUNTABILITY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2022 43. Capital management (continued) Group 2022 2021 RM million RM million Loans and borrowings (Note 32) 8,758 6,106 Gross debt 8,758 6,106 Less: Cash and bank balances (Note 26) (2,859) (1,821) Other investments, current (Note 22) (14) (229) Net debt 5,885 4,056 Total equity 4,740 4,026 Gross debt to equity ratio 1.85 1.52 Net debt to equity ratio 1.24 1.01 The Group and the Company are required to comply with financial covenants such as Debt Service Coverage Ratio and Gearing Ratio, as defined in the respective facility agreements. For the financial years ended 31 January 2022 and 2021, the Group and the Company have complied with these requirements. 44. Perpetual securities (i) By Yinson TMC Sdn. Bhd. (“YTMC”) (a) RM950 million On 8 May 2018, YTMC issued RM950 million Sukuk Mudharabah under its RM1.5 billion Perpetual Sukuk Mudharabah Programme. The perpetual securities are: • unconditionally and irrevocably guaranteed by the Company; • direct, unsecured, unconditional and unsubordinated obligations of the subsidiary; and • rank at least pari passu with all other present and future unconditional, unsubordinated and unsecured obligations of the subsidiary at all times, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application. The perpetual securities are unrated and are not listed on Bursa Malaysia Securities Berhad or on any other stock exchange bearing no fixed maturity date but are callable 15 years from the date of issuance (“First Call Date”) falling due on 9 May 2033. The issued instrument carries a periodic distribution rate of 6.8% per annum, distributable semi-annually calculated at the nominal value of securities issued. The distribution rate will be subject to an agreed one time step-up margin of 1% per annum after First Call Date. Pursuant to the terms and conditions of the program, YTMC has no obligation to pay any distribution and has the option to elect for distribution deferment at its sole discretion, which does not constitute a breach of covenant. The perpetual securities may also be redeemed at the option of YTMC upon the occurrence of certain events by YTMC in accordance with the terms and conditions of the perpetual securities. From the Group’s perspective under MFRS 132 “Financial Instruments: Presentation”, the Perpetual Securities is classified as equity because the payment of any distribution or redemption is at the discretion of the Group.
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