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Notes to the Consolidated Financial Statements

31st March 2018

3 FINANCIAL RISK MANAGEMENT (CONTINUED)

3.1 Financial risk factors (Continued)

(b) Credit risk

Credit risk arises from cash and cash equivalents and short-term deposits with banks
and financial institutions, loans and receivables, as well as credit exposures to customers,
including outstanding receivables. Management has a credit policy in place and the
exposures to these credit risks are monitored on an ongoing basis.

The Group’s cash and short-term deposits are placed with reputable banks and financial
institutions. For credit exposures from customers, management assesses the credit quality of
each individual major customer, taking into account its financial position, past experience and
other factors.

(c) Liquidity risk

Prudent liquidity risk management includes maintaining sufficient cash, the availability of
funding from an adequate amount of committed credit facilities and the ability to close out
market positions.

The Group maintains its liquidity mainly through funding generated from its daily operations
and maintaining funding availability under committed credit facilities.

Banking facilities have been put in place for contingency purposes. As at 31st March 2018,
the Group’s total available banking facilities amounted to approximately HK$1,245 million
(2017: HK$1,177 million), of which approximately HK$134 million (2017: HK$175 million) has
been utilised.

The table below analyses the Group’s financial liabilities that will be settled into relevant
maturity groupings based on the remaining period at the balance sheet date to the
contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows.

ALCO HOLDINGS LIMITED ANNUAL REPORT 2018 81