ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) E. CAPITAL STRUCTURE AND FINANCING This section provides information relating to the Group’s capital structure and how they affect the Group’s financial position and performance, and how the risks are managed. The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy financial metrics in order to support its business and maximise shareholder value. Capital consists of total shareholders’ funds and gross debts. The Group manages its capital structure and makes adjustment to it, in the light of changes in economic and financial market conditions. The Group may adjust the dividend payout to shareholders, buy back or issue new shares to optimise capital structure within the Group. E1 Capital management E6 Share capital E2 Finance costs, net E7 Treasury shares E3 Investments E8 Capital reserves E4 Borrowings E9 Other reserves E5 Commitments and contingent liabilities E10 Dividends E1 Capital management The Group is currently in a net debt position and will continue to be guided by prudent financial policies of which gearing is an important aspect. Neither the Company nor any of its subsidiaries is subject to externally imposed capital requirements. Group 2020 2019 $’000 $’000 Gross debt Bank loans 115,525 477,409 Commercial papers 396,230 1,436,140 Medium term notes 987,841 – Lease liabilities 527,734 424,158 Other loans 19,565 – Financial guarantees 15,332 106,052 2,062,227 2,443,759 23 7 ANNUAL REPORT 2 0 2 0 / CORPORATE OVERVI EW PERFORMANCE REVI EW SUSTAINABI L ITY CORPORATE GOVERNANCE F INANCIAL REPORT