Frontken Berhad Annual Report 2020

Annual Report 2020 133 FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) Notes to the Financial Statements (cont’d) 28. FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Risk Management Policies (Cont’d) Liquidity risk (Cont’d) (i) Maturity analysis (Cont’d) 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):- (Cont’d) Contractual Carrying Undiscounted Amount Cash Flows Within 1 year The Company RM RM RM 2020 Non-derivative financial liabilities Other payables and accrued expenses 4,440,742 4,440,742 4,440,742 Financial guarantee contracts in relation to corporate guarantee given to subsidiaries – 510,203 510,203 4,440,742 4,950,945 4,950,945 2019 Non-derivative financial liabilities Lease liabilities 97,272 102,120 102,120 Other payables and accrued expenses 3,888,523 3,888,523 3,888,523 Amount owing to subsidiaries - interest-free 3,431,325 3,431,325 3,431,325 Financial guarantee contracts in relation to corporate guarantee given to subsidiaries – 2,103,903 2,103,903 7,417,120 9,525,871 9,525,871 (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.