WILLAS-ARRAY ELECTRONICS (HOLDINGS) LIMITED
116
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2016
5.
F I NANC I AL I NSTRUMENTS , F I NANC I AL R I SKS AND CAP I TAL
MANAGEMENT
– continued
(c)
Capital management policies and objectives
The Group manages its capital to ensure that entities in the Group will be able to continue as
a going concern while maximising the return to stakeholders through the optimisation of the
debt and equity balance.
The capital structure of the Group consists of net debt, which includes the borrowings
disclosed in Notes 22 and 25, offset by cash and cash equivalents, restricted bank deposits
and equity attributable to owners of the Company, comprising issued capital, reserves and
accumulated profits as disclosed in the notes to consolidated financial statements. The
Group is required to comply with bank covenants in loan agreements with banks.
The management reviews the capital structure on an ongoing basis. As a part of this review,
the management considers the cost of capital and the risks associated with each class
of capital. Based on the recommendations of the management, the Group will balance its
overall capital structure through the payment of dividends, new share issues and share buy-
backs as well as the issue of new debt or the redemption of existing debt. The Group’s
overall strategy remains unchanged throughout the year.
6.
RELATED COMPANY TRANSACTIONS
The Company
Except for disclosed elsewhere in the financial statements, some of the Company’s transactions
and arrangements are between members of the Group and the effects of these on the basis
determined between the parties are reflected in these financial statements. The intercompany
balances are unsecured, repayable on demand, interest-free and expected to be settled in cash
unless otherwise stated.
Transactions between the Company and its subsidiaries, which are related companies of the
Company, have been eliminated on consolidation and are not disclosed in this note. The Company
had given corporate guarantees (unsecured) to its banks in respect of banking facilities granted to
its associates; please refer to Note 39 to the financial statements.
