FGV Annual Report 2012

42 Felda Global Ventures Holdings Berhad 4 FINANCIAL RISK MANAGEMENT (continued) (b) Capital risk management policies The primary objective of the Group’s capital management policies is to ensure that it maintains healthy capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the financial year ended 31 December 2012 and 31 December 2011. The Group monitors capital using a gearing ratio, which is total debt divided by total equity attributable to owners of the Company. The Group includes borrowings, loan due to a significant shareholder and LLA liability within its total debt. Equity attributable to owners of the Company includes share capital, redeemable preference shares, share premium, reserves and retained earnings. The gearing ratio analysis for the Group and Company are as disclosed below: Group 2012 2011 RM’000 RM’000 With LLA liability Borrowings 599,669 802,492 Loan due to a significant shareholder 1,840,271 1,840,448 LLA liability 5,664,769 – Total debt 8,104,709 2,642,940 Equity attributable to owners of the Company 6,102,364 5,615,263 Gearing ratio 133% 47% Without LLA liability Borrowings 599,669 802,492 Loan due to a significant shareholder 1,840,271 1,840,448 Total debt 2,439,940 2,642,940 Equity attributable to owners of the Company 6,102,364 5,615,263 Gearing ratio 40% 47% Company 2012 2011 RM’000 RM’000 Loan due to a significant shareholder 1,840,271 1,840,448 Total equity 7,296,182 2,699,553 Gearing ratio 25% 68% Notes to the Financial Statements for the financial year ended 31 December 2012