MISC Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS MISC BERHAD | Annual Report 2017 296 38. CAPITAL MANAGEMENT Capital management is defined as the process of managing the composition of the Group's debt and equity to ensure it maintains a strong credit rating and healthy capital ratios that support its businesses and maximise its shareholder value. The Group's approach in managing capital is set out in the Group Corporate Financial Policy. The Group and the Corporation monitor and maintain a prudent level of total debt to total asset ratio to optimise shareholder value and to ensure compliance with covenants under debt agreements. The debt to equity ratios of the Group and of the Corporation as at 31 December 2017 and 31 December 2016 are as follows: Group Corporation Note 2017 RM'000 2016 RM'000 2017 RM'000 2016 RM'000 Short term borrowings 18(c) 7,717,608 7,372,969 2,275,362 2,804,497 Long term borrowings 18(c) 3,946,285 5,228,537 4,949,205 6,933,229 Gross debts 11,663,893 12,601,506 7,224,567 9,737,726 Cash, deposits and bank balances 23 5,900,724 6,559,207 2,577,773 3,468,856 Net debts 5,763,169 6,042,299 4,646,794 6,268,870 Total equity 35,904,764 39,330,953 21,649,955 25,930,764 Gross debt equity ratio 0.32 0.32 0.33 0.38 Net debt equity ratio 0.16 0.15 0.21 0.24