FGV Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 187 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 EXAMINED OUR NUMBERS 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 2018 and 31 December 2017. The Group considers its debts and total equity as capital and monitors capital using a gearing ratio, which is total debt divided by total equity. 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. Total equity includes share capital, treasury shares, reserves, retained earnings and non-controlling interests. The gearing ratio analysis for the Group and the Company are as disclosed below: Group With LLA liability 2018 RM’000 2017 RM’000 Borrowings 4,244,111 4,110,156 Loans due to a significant shareholder 1,159,103 1,387,316 LLA liability 4,328,008 4,393,280 Total debt 9,731,222 9,890,752 Total equity 6,616,473 7,873,026 Total capital with LLA liability 16,347,695 17,763,778 Gearing ratio 147% 126%