FGV Annual Report 2013

Felda Global Ventures Holdings Berhad 213 4 FINANCIAL RISK MANAGEMENT (Cont’d.) (a) Financial risk management policies (Cont’d.) Market risk (Cont’d.) (iii) Finance rate risk The Group’s finance rate risk mainly arises from LLA liability and term loans. LLA liability and term loans issued at variable rates expose the Group to cash flow finance rate risk. The Group’s borrowings from a significant shareholder and other borrowings except for term loans are at a fixed rate. The finance rate profile of the Group’s finance bearing financial assets, based on carrying amounts as at the end of the reporting period was: Group Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000 Financial assets At fixed rate Fixed deposits 4,632,239 5,464,772 1,900,673 4,179,612 At floating rate Amount due from jointly controlled entity - 75,306 - - If finance rates on its floating rate financial assets had been 10 basis points higher/lower with all other variables held constant, the profit after tax of the Group will increase/decrease by approximately RM nil (2012: RM571,000). The finance rate profile of the Group’s finance bearing financial liabilities, based on carrying amounts as at the end of the reporting period was: Group Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000 Financial liabilities At fixed rate Loan due to a significant shareholder 2,697,790 1,840,271 2,697,790 1,840,271 Revolving credits 136,642 - - - Bankers acceptances 1,395,736 561,000 - - Bank overdrafts 24,500 - - - Export credit refinancing 80,000 - - - At floating rate Term loans 13,032 38,669 - - LLA liability 4,844,390 5,664,769 - - 9,192,090 8,104,709 2,697,790 1,840,271 If finance rates on its floating rate financial liabilities and discount rate on LLA liability increased/decreased by 50 basis points with all other variables held constant, the profit after tax of the Group will decrease by RM213,000,0000 and increase by RM242,250,000 respectively. Other financial assets and financial liabilities are non-finance bearing, and therefore are not affected by changes in finance rates.