Frontken Berhad Annual Report 2016

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127 Frontken Corporation Berhad (651020-T)
ANNUAL REPORT2016
26. FINANCIAL INSTRUMENTS (CONT’D)
(d) Fair Value Information (Cont’d)
The fair values, which are for disclosure purpose, have been determined using the following basis:-
(i) The fair value of hire purchase payables, short-term borrowing and term loans determined by discounting
the relevant cash flows using current market interest rates for similar instruments at the end of the reporting
period. The interest rates used to discount the estimated cash flows are as follows:-
The Group The Company
2016 2015 2016 2015
% % % %
Hire purchase payables 1.70 - 5.64 1.51 - 5.64 - -
Short-term borrowings 2.39 - 3.33 2.36 - 3.33 - -
Term loans 1.40 - 6.46 1.68 - 6.72 6.46 6.72
27. CONTINGENT LIABILITY
The Company provided corporate guarantees to banks and financial institutions to secure banking facilities and leasing
of equipment provided to certain subsidiaries amounting to RM10,833,755 (2015 : RM35,426,387).
28. COMMITMENTS
(i) Operating lease commitments
The Group
2016 2015
RM RM
Non-cancellable future minimum lease payments
Not later than one year 2,212,584 1,803,479
Between one year and five years 5,552,495 3,576,318
Later than five years 12,459,651 12,389,716
20,224,730 17,769,513
The Group has various operating lease agreements for equipment, offices and other facilities. Most leases contain
renewable options. Lease terms do not contain restrictions on the Group’s activities concerning dividends,
additional debt or further leasing.
(ii) Capital commitments
As of 31 December 2016, the Group has the following capital commitments:
The Group
2016 2015
RM RM
Approved and contracted for:
Plant and equipment 9,690,898 5,089,260
Notes To The Financial Statements
(cont’d)