34.
FINANCIAL RISK MANAGEMENT (CONTINUED)
(a)
Credit risk (continued)
Financial assets that are neither past due nor impaired
Cash and cash equivalents that are neither past due nor impaired are placed with or entered
into with reputable financial institutions with high credit ratings and have no history
of default. Trade and other receivables that are neither past due nor impaired are with
creditworthy debtors with good payment record with the Group.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in
Note 17 (Trade and other receivables).
(b)
Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting
financial obligations due to shortage of funds. The Group’s and Company’s exposure to
liquidity risks arises primarily from mismatches of the maturities of financial assets and
liabilities.
The Group and the Company manages its liquidity risk by ensuring the availability of funding
through an adequate amount of committed credit facilities from financial institutions.
In addition, the Group and Company also maintain surplus cash for future investment
opportunities.
120
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
