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NOTES TO THE FINANCIAL STATEMENTS (cont’d)<br />
31 DECEMBER 2012<br />
40 CAPITAL MANAGEMENT<br />
The Group considers its capital to be comprised of its ordinary share capital, retained earnings and distributable<br />
reserves.<br />
The Group’s objectives when managing its capital are to safeguard the Group’s ability to continue as a going concern<br />
and to maintain an optimal capital structure so as to maximise shareholders value. In order achieve this objective, the<br />
Group seeks to balance risk and returns at an acceptable level and also to maintain a sufficient funding base to enable<br />
the Group to meet its working capital and strategic needs. Where necessary, adjustments to the amount of dividends<br />
paid to shareholders or the issuance of new shares may be considered.<br />
There have been no significant changes to the Group’s capital management objectives, policies and processes in the<br />
year nor has there been any change in what the Group consider to be its capital.<br />
The Group manages its capital based on debt-to-equity ratio. The debt-to-equity ratio is calculated as net debt divided<br />
by total equity attributable to the owners of the parent. Net debt is calculated as borrowings plus trade and other<br />
payables less cash and cash equivalents.<br />
The debt-to-equity ratio of the Group at the end of the reporting period is as follows:<br />
2012<br />
RM<br />
Group<br />
Finance lease and hire purchase payables 41,558,083 53,421,325<br />
Bank borrowings - 3,943,546<br />
Trade payables 1,568,010 2,363,185<br />
Other payables 11,198,955 32,317,554<br />
Shareholders’ advance 1,726,811 6,231,949<br />
2011<br />
RM<br />
56,051,859 98,277,559<br />
Less:<br />
Cash and bank balances (17,909,658) (19,241,908)<br />
Cash and bank balances, attributable to disposal group, net of financial liabilities - (26,819)<br />
Net debt 38,142,201 79,008,832<br />
Total equity attributable to the owners of the parent 63,329,856 43,995,678<br />
Debt-to-equity ratio 0.60 1.80<br />
Gunung Capital Berhad (330171-P)<br />
95<br />
annual report | 2012