DESTINI AR 2017

42. Capital Management (Cont’d) The Group monitors capital using a gearing ratio. The Group’s policy is to maintain a prudent level of gearing ratio that complies with debt covenants and regulatory requirements. The gearing ratios at end of the reporting period are as follows: 2017 2016 RM RM Total loans and borrowings 180,341,894 86,943,124 Less: Deposits, bank and cash balances (52,691,676) (77,108,397) Net debt 127,650,218 9,834,727 Total equity 509,305,744 481,379,394 Gearing ratio 25% 2% There were no changes in the Group’s approach to capital management during the financial year. The Group is not subject to any externally imposed capital requirements. 43. Subsequent Event On 10 November 2017, Destini Oil Services Sdn. Bhd. (“DOS”), a wholly-owned subsidiary of the Company entered into a joint venture and shareholders agreement (“JV Agreement”) with a joint venture partner, for the purpose of, amongst others, undertaking the business of oil and gas activities leading into drilling and related services, well intervention services, offshore greenfield development and decommissioning services in the South Asia and South-East Asia region, via a joint venture company (“JV Company”), to be incorporated in the Republic of Singapore. On 11 January 2018, the Company announced that all the Conditions Precedent of the JV Agreement have been duly fulfilled. On 15 January 2018, the Company announced that the JV Company by the name “Federal Destini (S) Pte Ltd” was incorporated in the Republic of Singapore, of which DOS owned 50% equity interest in the JV Company. 174 DESTINI BERHAD Financial Statements Notes to the 31 December 2017