Ntegrator International Ltd. - Annual Report 2020

93 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2020 24. Financial risk management (continued) (d) Capital risk The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings. Management monitors capital based on a debt-equity ratio. Additionally, the Group is also required by the banks to maintain a debt-equity ratio of not exceeding 3.0 times (2019: 3.0 times). The debt-equity ratio is calculated as total liabilities divided by total net tangible assets. Group Company 2020 2019 2020 2019 $’000 $’000 $’000 $’000 Total liabilities 21,714 22,061 449 500 Total equity 9,001 14,033 25,599 25,312 Debt-equity ratio 2.41 times 1.57 times 0.02 times 0.02 times The Group and the Company are in compliance with all externally imposed capital requirements for the financial years ended 31 December 2020 and 2019 except for the breach of loan covenants for the financial year ended 31 December 2020 which is disclosed in Note 18(b) to the financial statements. (e) Fair value measurements The carrying amount less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated based on quoted market prices or dealer quotes for similar instruments by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. The carrying amounts of current borrowings approximates their fair values. (f) Financial instruments by category The carrying amount of the different categories of financial instruments is as follows: Group Company 2020 2019 2020 2019 $’000 $’000 $’000 $’000 Financial assets, at amortised cost 25,705 30,042 8,004 7,776 Financial liabilities, at amortised cost 20,597 21,102 449 500