Frontken Berhad Annual Report 2017

118 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2017 27. FINANCIAL INSTRUMENTS (CONT’D) (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. (c) Classification of Financial Instruments The Group The Company 2017 2016 2017 2016 RM RM RM RM Financial Assets Fair value through profit or loss: Held-for-trading Short-term investments 3,508,429 8,996,233 2,108,006 5,390,526 Loans and receivables financial assets Trade receivables 91,295,458 95,871,500 - - Other receivables and deposits 4,761,209 4,578,567 22,708 36,987 Amount owing by subsidiaries - - 2,878,962 9,921,898 Amount owing by an associate 1,333,852 1,362,971 - - Fixed deposits with licensed banks 7,748,933 5,872,035 1,104,683 1,072,697 Cash and bank balances 119,313,578 88,745,512 7,649,011 9,993,581 224,453,030 196,430,585 11,655,364 21,025,163 Financial Liabilities Other financial liabilities Trade payables 18,291,318 20,057,585 - - Other payables and accrued expenses 59,770,930 51,777,594 2,194,444 1,238,091 Amount owing to subsidiaries - - 7,531,022 13,564,695 Bank overdrafts 5,181,941 - - - Term loans 15,836,487 24,074,255 2,037,933 4,128,510 Bank borrowings 12,460,720 4,652,400 - - Hire purchase payables 348,211 603,493 - - 111,889,607 101,165,327 11,763,399 18,931,296 Notes To The Financial Statements (cont’d)