Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2023 153 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 28. FINANCIAL INSTRUMENTS (CONT’D) (b) Capital Risk Management The Group and the Company manage their capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders value. To achieve this objective, the Group and the Company may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares. The Group and the Company manage their capital based on debt-to-equity ratio. The Group’s strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as external borrowings less cash and bank balances and fixed deposits with licensed banks. There was no change in the approach to capital management during the financial year. The debt-to-equity ratio is not disclosed in the financial statements as the external borrowing is insignificant. (c) Classification of Financial Instruments The Group The Company 2023 2023 RM RM Financial Assets Fair Value through Profit or Loss Short-term investments 32,647,658 17,369,607 Amortised Cost Trade receivables 118,974,970 - Other receivables 2,129,615 16,405 Amount owing by subsidiaries - 1,800,000 Fixed deposits with licensed banks 70,840,138 4,458,381 Cash and bank balances 316,172,678 738,468 508,117,401 7,013,254 Financial Liability Amortised Cost Trade payables 22,989,378 - Other payables and accrued expenses 91,740,206 7,278,474 Bank borrowing 81,703 - 114,811,287 7,278,474
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