Page 187 - KPJ_2011

40. Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and maximise shareholder value.
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.
The Group monitors capital using a gearing ratio, which is total borrowings divided by shareholders’ funds.
The Group’s gearing ratios as at 31 December 2011 and 2010 were as follows:
41. Segmental reporting
The chief operating decision-maker has been identimed as the management committee. This committee reviews
the Group’s internal reporting in order to assess performance and allocate resources. The committee considers the
business from both geographic and nature of business.
The Group principally operates in one main business segment namely the operating of specialist hospitals. Support
services of the Group mainly comprise provision of management services and pathology and laboratory services,
marketing and distribution of pharmaceutical, medical and surgical products and operating a private nursing college.
39. Financial risk management objectives and policies (continued)
(d) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash nows of a mnancial instrument will nuctuate
because of changes in foreign exchange rates.
The Group has three subsidiaries abroad; a hospital in Jakarta, Indonesia, an aged care facility in Queensland,
Australia and a pharmaceutical distributor in Singapore. The Group does not face signimcant exposure from
currency risk as these subsidiaries operate independently; pharmaceutical drugs and medical supplies are
supplied from and distributed in the country these subsidiaries operate. Hence, transactions involving foreign
currency are minimal and risks are limited to the translation of foreign currency functional mnancial statement to
that of the presentation currency.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2011 (continued)
Group
2011
RM’000
2010
RM’000
Current borrowings 140,991 362,676
Non-current borrowings 302,480 36,747
Total 443,471 399,423
Shareholders’ funds 892,954 768,647
Gearing ratio 0.50 0.52
ANNUAL REPORT 2011 182