298 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2023 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2023 43. Capital management For the purpose of the Group’s and the Company’s capital management, capital includes share capital and all other equity reserves attributable to owners of the Company. The objectives of the Group’s and the Company’s capital management are to maximise shareholders’ value, to maintain optimal capital structure to reduce cost of capital and to sustain future developments of the Group. In order to maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, shares buy-back or issue new shares. The Group and the Company monitor capital using gross and net debt to equity ratio. Net debt includes interest bearing loans and borrowings, less cash and short-term deposits and current other investments. Group 2023 RM million 2022 RM million Loans and borrowings (Note 32) 9,584 8,758 Gross debt 9,584 8,758 Less: Cash and bank balances (Note 26) (1,507) (2,859) Other investments, current (Note 22) (153) (14) Net debt 7,924 5,885 Total equity 6,458 4,740 Gross debt to equity ratio 1.48 1.85 Net debt to equity ratio 1.23 1.24 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 2023 and 2022, the Group and the Company have complied with these requirements. 44. Perpetual securities (i) By Yinson TMC Sdn. Bhd. (“YTMC”) (a) RM950 million Sukuk Mudharabah 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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