notes to the financial statements - Far East Orchard Limited

NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2008
33. Financial risk management (continued)
(b) Credit risk
74
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate
credit history and/or requiring deposits to be placed with the Group prior to provision of certain of its services. For
other financial assets, the Group adopts the policy of dealing only with high credit quality counterparties.
The Group has no significant concentrations of credit risk and has in place credit policies and procedures to
ensure on-going credit evaluation and active account monitoring.
As the Group and the Company does not hold any collateral, the maximum exposure to credit risk for each class
of financial instruments is the carrying amount of that class of financial instruments presented on the balance
sheet, except as follows:
The Company
2008 2007
$’000 $’000
Corporate guarantees provided to banks on subsidiaries’
banking facilities 145,681 99,000
The Group’s and the Company’s major classes of financial assets are bank deposits and trade receivables.
(i) Financial assets that are neither past due nor impaired
Bank deposits that are neither past due nor impaired are mainly deposits with reputable banks. Trade
receivables that are neither past due nor impaired are substantially companies with a good collection track
record with the Group.
ANNUAL REPORT 2008 ORCHARD PARADE HOLDINGS LIMITED