2008 Annual Report - Kenford Group Holdings Limited

Notes to the Financial Statements
For the year ended 31 March 2008
30. FINANCIAL INSTRUMENTS – RISK MANAGEMENT (Continued)
(b)
Liquidity risk
In the management of liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed
adequate by the management to fi nance the Group’s operations and mitigate the effects of short-term fl uctuation
in cash fl ows. The management of the Group is responsible for maintaining a balance between continuity and
fl exibility of funding through the use of banking facilities in order to meet the Group’s liquidity requirements.
The contractual maturities of fi nancial liabilities are shown as below:
2008 2007
HK$’000
HK$’000
In less than one year 191,783 192,298
In more than two years but not more than fi ve years 34,221 17,763
In more than fi ve years 14,367 –
240,371 210,061
(c)
Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in fi nancial loss
to the Group. The Group exposed to credit risk from loan and receivables. The Group has adopted a credit policy
to monitor and mitigate credit risk arising from trade and bills receivables. Credit limit is regularly reviewed and
approved by the Board. The Group assesses credit risk based on customer’s past due record, trading history,
fi nancial condition or credit rating. The Group does not expose to concentration of credit risk.
Without taking account of any collateral held or other credit enhancements, the maximum exposure to credit risk on
loan and receivables are the carrying amount of these assets and the maximum exposure to credit risk to the Group
is HK$94,374,000 (2007: HK$102,659,000).
31. FINANCIAL INSTRUMENTS – CARRYING AMOUNT AND FAIR VALUE
The directors considered that the carrying amounts of these categories approximate to their fair value.
78 KENFORD GROUP HOLDINGS LIMITED