Page 185 - KPJ_2011

39. Financial risk management objectives and policies (continued)
(a) Credit risk (continued)
The Group seeks to invest cash assets safely and promtability and buys insurance to protect itself against
insurable risk. In this regard, counterparties are assessed for credit limits are set to minimise any potential losses.
The Group’s cash and cash equivalents and short term deposits are placed with creditworthy mnancial institutions
and the risks arising there from are minimised in view of the mnancial strength of these mnancial institution.
Exposure to credit risk
At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:
- The carrying amount of each class of mnancial assets recognised in the statements of mnancial position.
Information regarding credit enhancements for trade and other receivables is disclosed in Note 23.
Financial assets that are neither past due nor impaired
Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 23. Cash and cash
equivalents that are neither past due nor impaired are placed with or entered into with reputable mnancial institutions.
Financial assets that are either past due or impaired
Information regarding trade receivables that are either past due or impaired is disclosed in Note 23.
Apart from those disclosed above, none of other mnancial assets is either past due or impaired.
(b) Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difmculty in meeting mnancial obligations due
to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches
of the maturities of mnancial assets and liabilities.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2011 (continued)
ANNUAL REPORT 2011 180