AUDITED FINANCIAL STATEMENTS 2022 65 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 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 2022 and 31 December 2021. 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 ultimate holding company 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 2022 RM’000 2021 RM’000 Borrowings 2,725,644 3,363,497 Loans due to ultimate holding company 333,316 634,665 LLA liability 3,680,354 3,804,790 Total debt 6,739,314 7,802,952 Total equity 7,884,685 7,186,518 Total capital with LLA liability 14,623,999 14,989,470 Gearing ratio 85% 109%
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