Annual Report 2019

ANNUAL REPORT 2019 253 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 March 2019 47. FINANCIAL INSTRUMENTS (continued) b. Financial risk management objectives and policies (continued) Credit risk and impairment assessment (continued) Notes: (continued) 2. Loan receivables/amounts due from related parties/customers’ deposits under escrow/other receivables (continued) Customers’ deposits under escrow represents the portion of the sale proceeds being held in the escrow accounts. The funds are remitted to the Group upon the issuance of the relevant certificates by the relevant government authorities. The directors consider the exposure of credit risk is low. For other receivables, the directors of the Company consider the exposure of credit risk, historical settlement and other forward-looking information. The rate of default of 12-month ECL of the other receivables range from 2% to 3% and allowance of credit loss of HK$4,237,000 was recognised during the year. 3. For pledged deposits, restricted bank deposits, bank balances and deposit in a financial institutions, the ECL is assessed by reference to probability of default and loss credit rating grade published by international credit agencies. Liquidity risk The Group’s liquidity position and its compliance with lending covenants is monitored closely by the management of the Group, to ensure that it maintains sufficient reserve of cash and adequate committed line of funding from major financial institutions to meet its liquidity requirement in the short and long term. The Group finances its working capital requirements through a combination of funds generated from operations and external borrowings. The following table details the Group’s remaining contractual maturity for its financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. Specifically, bank loans with a repayment on demand clause are included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities are based on the agreed repayment dates. The table includes both interest and principal cash flows.