Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2022 160 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 28. 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. (c) Classification of Financial Instruments The Group The Company 2022 2022 RM RM Financial Assets Fair Value through Profit or Loss Short-term investments 11,985,670 7,501,407 Amortised Cost Trade receivables 124,086,038 - Other receivables 11,914,453 38,319 Amount owing by subsidiaries - 1,350,000 Fixed deposits with licensed banks 13,161,038 - Cash and bank balances 317,358,590 2,775,298 466,520,119 4,163,617 Financial Liability Amortised Cost Trade payables 27,660,857 - Other payables and accrued expenses 107,928,313 4,349,367 Bank borrowing 19,719,600 - 155,308,770 4,349,367
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