CAHYA MATA SARAWAK ANNUAL REPORT 2016

www.cmsb .com.my Cahya Mata Sarawak Berhad 190 Section 07 Financial StatementS NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2016 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT'D.) (c) Market risk (cont'd.) (iii) Other price risk (cont'd.) • Equity price risk sensitivity analysis At the reporting date, if prices for equity securities increase by 10% with all other variables being held constant, the Group’s and the Company’s profit for the year will be RM460,000 (2015: RM3,406,315) higher as a result of higher fair value gain on fair value through profit or loss investments in equity instruments. A 10% decrease in the underlying equity prices would have had the equal but opposite effect to the amounts shown above. 42. CAPITAL MANAGEMENT The primary objective of the Group’s and the Company’s capital management is to ensure that they maintain healthy capital ratios to support their businesses and maximise shareholder value. No changes were made in the objectives, policies and processes during the years ended 31 December 2016 and 2015. The Group and the Company review their capital structure and make adjustments to reflect economic conditions, business strategies and future commitments on a continuous basis. The Group and the Company monitor capital using a gearing ratio. The gearing ratio is calculated as loans and borrowings divided by equity attributable to owners of the Company. The Group and the Company are in compliance with all externally imposed capital requirements in respect of their external borrowings for the financial years ended 31 December 2016 and 2015. Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Loans and borrowings (Note 30) 247,956 163,678 35,000 - Equity attributable to the owners of the Company 2,212,836 2,017,501 1,073,656 - Gearing ratio (times) 0.11 0.08 0.03 -