144.
INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
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For the financial year ended 31 December 2015
35.
CAPITAL MANAGEMENT
The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to
support its business and maximise shareholder value.
Certain subsidiary companies are required to comply with loan covenants imposed by their lenders, such as
maintaining the level of existing share capital. This externally imposed requirement has been complied with by the
relevant subsidiary companies for the financial year ended 31 December 2015 and 2014. Additionally, certain subsidiary
companies in Indonesia are required by the Corporate Law to maintain a non-distributable reserve until it reaches
20% of the issued and paid share capital. This externally imposed capital requirement will be complied by the relevant
subsidiary companies by their next annual general meeting.
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 years
ended 31 December 2015 and 2014.
The Group monitors capital using gearing ratios, by dividing net loans and borrowings with total equity. The Group’s
policy is to keep the gearing ratio within the range of gearing ratios of leading companies in similar industry in Indonesia
in order to secure access to finance at a reasonable cost.
2015
2014
Rp million
Rp million
Non-current interest-bearing loans and borrowings
5,741,803
5,068,141
Current interest-bearing loans and borrowings
4,398,801
4,749,195
10,140,604
9,817,336
Less: Cash and cash equivalents
(1,969,100)
(3,585,780)
Net debts
8,171,504
6,231,556
Total equity
24,245,694
23,717,152
Gearing ratio
34%
26%