2012 Annual Report - Media Prima Berhad

Media Prima Berhad
Notes to
the Financial Statements
for the financial year ended 31 December 2012
44 FINANCIAL RISK MANAGEMENT (CONTINUED)
(a)
Market risks (continued)
Impact of changes to interest rates to
profit and loss (net of tax)
Finance cost Interest rates
for the financial for the financial
year ended year ended
31 December 2011 31 December
(Note 4) 2011 –0.50% –0.25% 0.25% 0.50%
RM’000 % RM’000 RM’000 RM’000 RM’000
Revolving credit (514) 3.85 50 25 (25) (50)
BGMTN (7,316) 4.27 643 321 (321) (643)
Bankers’ Acceptance (862) 3.42 95 47 (47) (95)
RFRB (9,096) 6.50 525 262 (262) (525)
Term loans (10,664) 5.10 784 392 (392) (784)
Bank guarantee (2,266) 2.46 345 173 (173) (345)
Hire purchase (1,367) 3.98 129 64 (64) (129)
(32,085) 2,571 1,284 (1,284) (2,571)
(b)
Credit risk
Credit risk arises when sales are made on deferred credit terms. The Group seeks to invest cash assets safely
and profitably. It also seeks to control credit risk by setting counterparty limits and ensuring that sales of
products and services are made to customers with an appropriate credit history. The Group considers the risk
of material loss in the event of non-performance by a financial counterparty to be unlikely.
The Group has no significant concentration of credit risk except that the majority of its deposits are placed with
major financial institutions in Malaysia.
The Group trades with a large number of customers who are nationally and internationally dispersed but within
the commercial television, radio broadcasting, outdoor advertising, content production/provision and publishing/
print industry. Due to these factors, the Group believes that no additional credit risk beyond amounts allowed
for collection losses is inherent in the Group’s trade receivables.
Credit risk is managed on a group basis, except for credit risk relating to accounts receivable balances. Each
entity is responsible for managing and analysing the credit risk for each of their new clients before standard
payment and delivery terms and conditions are offered. Credit risk arises from cash and cash equivalents and
deposits with banks and financial institutions, as well as credit exposures on outstanding receivables and
committed transactions. For banks and financial institutions, only independently rated parties with a minimum
rating of ‘A’ are accepted. Customer’s credit quality is assessed, taking into account its financial position, past
experience and other factors if no external credit ratings available for the customers. Individual risk limits are
set based on internal or external ratings. The utilisation of credit limits is regularly monitored.
The Group does not expect any losses from non-performance by these counterparties.
240
annual
report
2012