FGV Annual Report 2012

39 F i n a n c i a l S t a t e m e n t s 2 0 1 2 P e n y a t a K e w a n g a n 4 FINANCIAL RISK MANAGEMENT (CONTINUED) (a) Financial risk management policies (continued) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group adopts the policy of dealing with customers with an appropriate credit history, and obtaining sufficient security where appropriate to mitigate credit risk. The financial assets exposure can be illustrated as follows: 2012 Revolving commitment Guarantees given to given to a jointly Financial for a controlled Maximum assets subsidiary entity exposure RM’000 RM’000 RM’000 RM’000 Group Trade receivables 490,537 – – 490,537 Other receivables 174,825 – – 174,825 Amount due from jointly controlled entity 318,224 – – 318,224 Amount due from a significant shareholder 73,091 – – 73,091 Amounts due from other related companies 503,650 – – 503,650 Derivative financial assets 336,060 – – 336,060 Company Amounts due from subsidiaries 39,447 – – 39,447 Other receivables 299,314 – – 299,314 Amount due from a significant shareholder 52,442 – – 52,442 Amounts due from other related companies 63,776 – – 63,776 2011 Group Trade receivables 305,387 – – 305,387 Other receivables 81,957 – – 81,957 Amount due from jointly controlled entity 45,520 – 30,144 75,664 Amounts due from other related companies 4,118 – – 4,118 Loan due from other related company 27,926 – – 27,926 Derivative financial assets 92,676 – – 92,677 Company Amounts due from subsidiaries 197,179 305,067 – 502,246 Other receivables 6,906 – – 6,906 Amounts due from other related companies 2,182 – – 2,182 The trade receivable exposure is closely monitored and continuously followed up. The Group generally has no significant concentration of credit risk due to the Group’s large number of customers other than sales transactions made to certain related parties as disclosed in Note 27. The Group’s cash and cash equivalents were largely placed with major financial institutions in Malaysia. The Directors are of the view that the possibility of non- performance by these financial institutions, including non-rated financial institutions, is remote on the basis of their financial strength.