109
FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
(cont’d)
26. BANK BORROWINGS
The Group
The Company
2014
2013
2014
2013
RM
RM
RM
RM
Short-term borrowings
- Money market security
6,215,515
2,594,300
–
–
- Revolving credit
–
500,000
–
–
Term loans - current portion (Note 23)
4,559,547
5,227,560
1,810,448
–
10,775,062
8,321,860
1,810,448
–
The short-term borrowings represent money market loan and revolving credit facilities obtained by two
subsidiaries incorporated in Singapore and Malaysia which are rolled over every month and three months
respectively. The revolving credit facilities were fully repaid during the financial year. The money market loan
and revolving credit facilities bear effective interest rates ranging from 2.12% to 2.39% (2013: 2.07% to
2.15%) per annum and NIL (2013: 4.90%) per annum respectively.
The security for the bank borrowings are disclosed in Note 23 to the financial statements.
27. FINANCIAL INSTRUMENTS
The Group’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate
risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
Group’s financial performance.
(a)
Financial Risk Management Policies
The Group’s policies in respect of the major areas of treasury activity are as follows:-
(i)
Foreign currency risk
The Group is exposed to foreign currency risk on transactions and balances that are denominated
in foreign currencies. The currencies giving rise to this risk are primarily United States Dollar and
Singapore Dollar. Foreign currency risk is monitored closely on an ongoing basis to ensure that
the net exposure is at an acceptable level.
