FGV Annual Report 2014

4 Financial Risk Management (continued) (a) Financial risk management policies (continued) Credit risk (continued) Financial assets Collateral held as security Net exposure 2013 RM’000 RM’000 RM’000 Group Trade receivables 1,011,715 246,288 765,427 Other receivables (excluding prepayments) 268,327 – 268,327 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 (excluding prepayments) 173,470 – 173,470 Amount due from a significant shareholder 377 – 377 Amounts due from subsidiaries 58,584 – 58,584 Amounts due from other related companies 61 – 61 Loan due from a subsidiary 1,062 – 1,062 Trade receivables, amount due from an 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 deposits, cash and bank balances 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. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulties in meeting obligations due to shortage of funds. The Group maintains a sufficient level of cash and cash equivalents to meet the Group’s working capital requirements by closely monitoring its cash flows. Due to the nature of its business, the Group has adopted prudent liquidity risk management in maintaining and obtaining sufficient credit facilities from financial institutions. Cash flow forecasting is performed in the operating entities of the Group and then aggregated by management. Management monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal statements of financial position ratio targets and, if applicable, external regulatory or legal requirements – for example, currency restrictions. Felda Global Ventures Holdings Berhad pg 204 NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2014