FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 210 FINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 4 FINANCIAL RISK MANAGEMENT (CONTINUED) (b) Capital risk management policies The Group's primary objectives on capital management policies are to safeguard the Group's ability to maintain healthy capital ratios to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. 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 2016 and 31 December 2015. 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, loans due to a significant shareholder and LLA liability within its total debt while loans due to subsidiaries are additionally included for the Company's 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 the Company are as disclosed below: Group With LLA liability 2016 RM'000 2015 RM'000 (Restated) Borrowings 3,891,132 3,550,419 Loans due to a significant shareholder 1,689,005 1,893,290 LLA liability 4,407,564 4,627,195 Total debt 9,987,701 10,070,904 Equity attributable to owners of the Company 5,794,375 5,827,303 Gearing ratio 172% 173% As at 31 December 2016, the Group had complied with all external financial covenants.