189
C.1
CAPITAL RISK MANAGEMENT
The Group’s objective in capital risk management is mainly to
safeguard business continuity in order to guarantee returns
for shareholders and benefits for other stakeholders. The
Group also aims to maintain an optimal capital structure in
order to reduce the cost of debt and to comply with a series
of covenants required by the various Credit Agreements (Note
32).
The Group also monitors capital on the basis of its gearing
ratio (ie. the ratio between net financial position and capital).
Note 12 contains details of how the net financial position is
determined. Capital is equal to the sum of equity, as reported
in the Group consolidated financial statements, and the net
financial position.
The gearing ratios at 31 December 2012 and 31 December 2011
are shown below:
(in millions of Euro)
2012
2011
Net financial position
918
1,064
Equity
1,159
1,104
Total capital
2,077
2,168
Gearing ratio
44.20%
49.05%
