FGV Annual Report 2014

4 Financial Risk Management (continued) (a) Financial risk management policies (continued) Market risk (continued) (iii) Finance rate risk (continued) If finance rates on its floating rate financial liabilities and discount rate on LLA liability increased/decreased by 50 basis points and borrowings increased/decreased by 10 basis points with all other variables held constant, the profit after tax of the Group will increase by RM205,936,0000 (2013: RM242,250,000) and decrease by RM232,186,000 (2013: RM213,000,000) respectively. Other financial assets and financial liabilities are non-finance bearing, and therefore are not affected by changes in finance rates. 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: Financial assets Collateral held as security Net exposure 2014 RM’000 RM’000 RM’000 Group Trade receivables 833,941 173,544 660,397 Other receivables (excluding prepayments) 276,728 – 276,728 Amount due from a significant shareholder 79,233 – 79,233 Amount due from joint ventures 328,941 – 328,941 Amount due from an associate 36 – 36 Amounts due from other related companies 63,964 – 63,964 Derivative financial assets 15,337 – 15,337 Company Other receivables (excluding prepayments) 87,975 – 87,975 Amount due from a significant shareholder 2,308 – 2,308 Amounts due from subsidiaries 101,761 – 101,761 Amounts due from other related companies 1,571 – 1,571 Loan due from a subsidiary 1,062 – 1,062 Introduction Performance Highlights About FGV Reports Financial Statements Others Strategy and Value Creation Performance Review & Progress Foreword to Shareholders Annual General Meeting Annual Report 2014 pg 203