289 PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the financial statements 39
Financial instruments Financial risk management policies The Group/Company is exposed to normal business risks from changes in market interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties. The Group/Company does not hold or issue derivative financial instruments for speculative or trading purposes. Risk management is integral to the whole business of the Group/Company. The management continually monitors the Group’s/Company’s risk management process to ensure that an appropriate balance between risk and control is achieved. Capital management The Board of Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor, partners and other stakeholders. In addition, the Board monitors the return on capital and the level of dividends to ensure business sustainability. Interest rate risk Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s / Company’s operations and its cash flows because the Group’s/Company’s finances loans which have both floating and fixed interest rates for their operations. The Group/Company has managed this risk to ensure the appropriateness to the business operation. The effective interest rates of loans receivable as at 31 December and the periods in which the loans receivable mature or re-price was as follows:
Effective interest Rate (% per annum) 2013 Non-current Loans to related party Total 2012 Non-current Loans to related party
Total
Consolidated financial statements Within 1 After 1 year but After 5 Total year within 5 years years (in million Baht)
-
-
-
-
-
greater of the U.S. Prime Rate plus margin
-
1,220
-
1,220
-
1,220
-
1,220