FGV Annual Report 2013

Felda Global Ventures Holdings Berhad 214 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 4 FINANCIAL RISK MANAGEMENT (Cont’d.) (a) Financial risk management policies (Cont’d.) 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, including payments in advance, to mitigate credit risk. The financial assets exposure can be illustrated as follows: Collateral held Net 2013 Financial assets as security exposure RM’000 RM’000 RM’000 Group Trade receivables 1,011,715 246,288 765,427 Other receivables 268,302 - 268,302 Amount due from a significant shareholder 81,923 - 81,923 Amount due from joint ventures 421,838 - 421,838 Amount due from an associate 37 - 37 Amounts due from other related companies 29,060 - 29,060 Derivative financial assets 3,499 3,499 Company Other receivables 174,532 - 174,532 Amount due from a significant shareholder 377 - 377 Amounts due from subsidiaries 58,584 - 58,584 Amounts due from other related companies 61 - 61 Collateral held Net 2012 Financial assets as security exposure RM’000 RM’000 RM’000 Group Trade receivables 490,537 - 490,537 Other receivables 174,825 - 174,825 Amount due from a significant shareholder 73,091 - 73,091 Amount due from joint ventures 318,224 - 318,224 Amounts due from other related companies 503,650 - 503,650 Derivative financial assets 5,189 - 5,189 Company Other receivables 299,314 - 299,314 Amount due from a significant shareholder 52,442 - 52,442 Amounts due from subsidiaries 39,447 - 39,447 Amounts due from other related companies 63,776 - 63,776 Trade receivables, amount due froman associate, joint ventures and other related parties exposure are 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 28 and Note 53. 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 those non-rated financial institutions, is remote on the basis of their financial strength