Wqeqe

SUMMARIZE

In this assignment, our group was choose Cepatwawasan Group Berhad. This company is under plantation sector and we also analyse their financial statement at year 2012. After we analyse their financial statement, we found that the company faces six financial risk for their business such as credit risk, liquidity risk, interest rate risk, foreign currency risk, commodity price risk and other risk. Cepatwawasan Group Berhad exposure to credit risk arise primarily from trade and other receivable. This company minimize their credit risk by dealing exclusively with high credit rating counterparties and they also use on an on going basis to monitor their receivable balance. For the liquidity risk, this company faces the problem from mismatch of the maturity of financial asset and liability. Cepatwawasan Group Berhad financial statement shows that, about 15% of the loan and borrowing will mature in less than one year based on the carry amount and all the company financial asset and liability which based on contractual undiscounted amount are due either on demand or settle within one year. Cepatwawasan Group Berhad exposure to the interest rate risk arise primarily from their loan and borrowing. According to the financial statement, if interest rate had been 25 basic point lower/higher, with all other variable held constant, the Cepatwawasan Group Berhad profit net of tax would have been RM145,810 higher/lower, arise mainly as a result of lower/higher interest expense on floating rate loan and borrowing. The assume movement in basic point for interest rate sensitivity analysis is based on the currently observable market environment. For the foreign currency risk, the Cepatwawasan Group Berhad hold cash and cash equivalent denominate in foreign currency for working capital purpose. For the fifth risk that Cepatwawasan Group Berhad faces is commodity price risk. The price of agricultural commodity is subject to wide fluctuation due to unpredictable factor such as...