Frontken Berhad Annual Report 2019

124 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2019 30. FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Risk Management Policies (Cont’d) (iv) Credit risk (Cont’d) Assessment of impairment losses (Cont’d) • Amount owing by subsidiaries The Company applies the 3-stage general approach to measure expected credit losses for amount owing by subsidiaries. At the end of the reporting period, there was no indication that the amount owing is/are not recoverable other than those which had already impaired in the previous financial year. The movements in the loss allowances are disclosed in Note 20 to the financial statements. • Financial Guarantee Contracts All of the financial guarantee contracts are considered to be performing, have low risks of default and historically there were no instances where these financial guarantee contracts were called upon by the parties of which the financial guarantee contracts were issued to. Accordingly, no loss allowances were identified based on 12-month expected credit losses. (v) Liquidity risk Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities. Maturity analysis The following table sets out the maturity profile of the financial liabilities 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):- Weighted Average Contractual Effective Carrying Undiscounted Interest Rate Amount Cash Flows Within 1 year 1 – 5 years Over 5 years The Group % RM RM RM RM RM 2019 Non- derivative financial liabilities Lease liabilities 2.80 - 5.25 14,963,954 19,593,182 3,612,250 7,339,684 8,641,248 Term loans 3.40 - 3.76 843,865 852,884 852,884 - - Trade payables - 16,889,347 16,889,347 16,889,347 - - Other payables and accrued expenses - 65,050,050 65,050,050 65,050,050 - - 97,747,216 102,385,463 86,404,531 7,339,684 8,641,248 Notes To The Financial Statements (cont’d)