ANNUAL REPORT
2016
.89
NOTES TO THE
FINANCIAL STATEMENTS
19.
SHARE CAPITAL (CONT¡¯D)
The management monitors the capital on the basis of the debt-to-adjusted capital ratio. This ratio is calculated
as net debt / adjusted capital (as shown below). Net debt is calculated as total borrowings less cash and cash
equivalents.
2016
$¡¯000
2015
$¡¯000
Net debt:
All current and non-current borrowings including finance leases
38,673
17,701
Less cash and cash equivalents
(6,655)
(9,581)
Net debt
32,018
8,120
Adjusted capital:
Total equity
20,462
25,064
Adjusted capital
20,462
25,064
Debt-to-adjusted capital ratio
1.56
0.32
The unfavourable change as shown by the increase in the debt-to-adjusted capital ratio for the reporting year
resulted primarily from the increase in new debt. There was an unfavourable change with decreased retained
earnings.
In order to maintain its Listing on the Catalist Board of the SGX-ST, the company has to have share capital with a
free float of at least 10% of the shares. The company met the capital requirement on its initial listing and the rules
limiting treasury share purchases mean it will continue to satisfy that requirement, as it did throughout the reporting
year. Management receives a report from the share registrars frequently on substantial share interests showing the
non-free float to ensure continuing compliance with the 10% limit throughout the reporting year.
The management does not set a target level of gearing but uses capital opportunistically to support its business
and to add value for shareholders. The key discipline adopted is to widen the margin between the return on capital
employed and the cost of that capital.
