74 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 4 FINANCIAL RISK MANAGEMENT (CONTINUED) (b) Capital risk management policies (continued) Group (continued) Without LLA liability 2023 RM’000 2022 RM’000 Borrowings 3,432,802 2,725,644 Loans due to ultimate holding company - 333,316 Total debt 3,432,802 3,058,960 Total equity 7,581,980 7,884,685 Total capital without LLA liability 11,014,782 10,943,645 Gearing ratio 45% 39% The Group is required to comply with certain financial covenants for its major debts facilities, including: (i) consolidated net tangible position; (ii) consolidated net debt and financing to equity ratio; (iii) consolidated net debt and financing to earnings before interest, tax, depreciation and amortisation (“EBITDA”) ratio; and (iv) consolidated finance payment cover ratio. MSM Malaysia Holdings Berhad (“MSMH”), a subsidiary of the Company would have not compiled with two of the financial covenants for its Islamic term loan. MSMH has received a Supplemental Letter dated 13 December 2023 from the lender granting the waiver on two out of three financial covenants and therefore was not required to meet these two financial covenants for the financial year ended 31 December 2023. MSMH will continue to monitor the compliance of the financial covenants and will engage the lenders as and when required. Company 2023 RM’000 2022 RM’000 Loans due to ultimate holding company - 333,316 Loans due to subsidiaries 973,764 811,034 Borrowings 897,344 497,374 Total debt 1,871,108 1,641,724 Total equity 7,244,216 7,545,786 Total capital 9,115,324 9,187,510 Gearing ratio 26% 22% There is no financial covenants imposed for the Company.
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