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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
26. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(v) Liquidity risk (Cont’d)
Maturity analysis (Cont’d)
The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period
based on contractual undiscounted cash flows (including interest payments computed using contractual
rates or, if floating, based on the rates at the end of the reporting period):- (Cont’d)
Contractual
Contractual
Carrying
Undiscounted
Interest Rate
Amount
Cash Flows
Within 1 year
1 – 5 years
The Company
%
RM
RM
RM
RM
2016
Term loan
6.46
4,128,510
4,400,187
2,296,104
2,104,083
Other payables
-
1,238,091
1,238,091
1,238,091
-
Amount owing
to subsidiaries
- interest-free
-
13,564,695
13,564,695
13,564,695
-
18,931,296
19,202,973
17,098,890
2,104,083
2015
Term loan
6.72
6,065,353
6,699,856
2,282,044
4,417,812
Other payables
-
1,376,615
1,376,615
1,376,615
-
Amount owing
to subsidiaries
- interest bearing
3.00
81,385
81,385
81,385
-
- interest-free
-
15,115,433
15,115,433
15,115,433
-
22,638,786
23,273,289
18,855,477
4,417,812
(b) Capital Risk Management
The Group manages its 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
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 manages its 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 Group’s approach to capital management during the financial year.
The debt-to-equity ratio of the Company is not disclosed in the financial statements as the cash and bank balances
and fixed deposits with licensed banks are in surplus position after net off with external borrowings.
The Group is also required to comply with certain loan covenants, failing which, the banks may call an event of
default. The Group has complied with requirement.
Notes To The Financial Statements
(cont’d)