117
FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
(cont’d)
27. FINANCIAL INSTRUMENTS (CONT’D)
(a)
Financial Risk Management Policies (Cont’d)
(v)
Liquidity risk (Cont’d)
Weighted
Contractual
average
Carrying undiscounted
effective rate
amount
cash flows Within 1 year
1 – 5 years
The Company
%
RM
RM
RM
RM
2014
Term loan
6.79
7,876,178
8,995,090
2,289,498
6,705,592
Other payables
–
1,832,062
1,832,062
1,832,062
–
Amount owing to
subsidiaries
- interest bearing
3.00
2,715,810
2,715,810
2,715,810
–
- interest free
–
12,422,503 12,422,503 12,422,503
–
24,846,553 25,965,465 19,259,873
6,705,592
2013
Other payables
–
168,411
168,411
168,411
–
Amount owing to
subsidiaries
- interest bearing
3.00
2,663,854
2,663,854
2,663,854
–
- interest free
–
3,030,758
3,030,758
3,030,758
–
5,863,023
5,863,023
5,863,023
–
(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 their 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, return of capital to shareholders or issue
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 disclose 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.
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain
a consolidated shareholders’ equity (total equity attributable to owners of the Company) equal to or
not less than the 25% of the issued and paid-up share capital (excluding treasury shares) and such
shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.
