United Energy Group Limited - HKExnews

Annual Report 2009
Notes to the Financial Statements
For the nine months ended 31 December 2009
5. FINANCIAL RISK MANAGEMENT (Continued)
(a) Interest rate risk (Continued)
At 31 December 2009, if interest rates at that date had been 50 basis points lower/higher with all other
variables held constant, consolidated loss after tax for the period would have been approximately
HK$1,898,000 higher/lower, arising mainly as a result of lower/higher interest income on the bank deposits
bearing interest at variable rates.
At 31 March 2009, if interests rates at that date had been 50 basis points lower/higher with all other variables
held constant, consolidated loss after tax for the year would have been approximately HK$1,393,000 higher/
lower, arising mainly as a result of lower/higher interest income on the bank deposits bearing interest at
variable rates.
The Group’s certain bank deposits bear interests at fixed interest rates, and therefore are subject to fair
value interest rate risks.
(b)
Liquidity risk
The Group’s policy is to regularly monitor current and expected liquidity requirements to ensure that it
maintains sufficient reserves of cash to meet its liquidity requirements in the short and long term.
The maturity of the Group’s financial liabilities at the end of reporting period is less than one year.
(c)
Credit risk
The carrying amount of the bank and cash balances, trade and other receivables and financial assets at
fair value through profit or loss included in the consolidated statement of financial position represents the
Group’s maximum exposure to credit risk in relation to the Group’s financial assets.
The Group has significant concentration of credit risk as the trade receivables as at 31 December 2009
were due from a single customer. It has policies in place to ensure that sales are made to customers with
an appropriate credit history. The amount due was subsequently settled in 2010.
The Group has no significant concentrations of credit risks on other receivables. The credit quality of the
counterparties in respect of other receivables is assessed by taking into account their financial position,
credit history and other factors. Given the constant repayment history, the directors are of the opinion that
the risk of default by these counterparties is low.
The credit risk on bank and cash balances is limited because the counterparties are banks with high creditratings
assigned by international credit-rating agencies and PRC large state-controlled banks.
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