TUNG LOK RESTAURANTS (2000) LTD / Annual Report
2016
82
Notes to the financial statements
For the financial year ended 31 March 2016
23.
Other payables (cont’d)
(c)
Deferred revenue mainly consists of loyalty points issued on the Group’s Tung Lok First Card Scheme and
advertising and promotion cash funding extended by credit card banks. Under the Tung Lok First Card Scheme,
card members dining at the Group’s restaurants are entitled to receive loyalty points depending on their level
of spending, which can be used to offset subsequent spending. Under the credit card program partnership
agreement, card members of the participating banks are entitled to dine at the Company’s restaurants with
certain privileges.
(d)
Included in accrued expenses which consist of mainly payroll expenses and utility charges, is an amount of
$1,582,258 (2015: $1,481,280) being provision for reinstatement costs of premises.
(e)
The related party is affiliated to a corporate shareholder of the Company. The amount is unsecured and interest-
free.
(f)
The Company is a party to certain financial guarantees which it provides to banks in respect of credit facilities
extended to these subsidiaries. Deemed guarantee fee has been accrued on guarantees issued to banks.
(g)
Included in others at the Group level, other than those highlighted above, are payables to non-trade creditors for
other operating expenses.
24.
Finance leases
Group
Minimum lease payments
Present value of minimum
lease payments
2016
2015
2016
2015
$
$
$
$
Amounts payable under finance leases:
Within one year
241,541
192,684
213,815
170,670
In the second to fifth year inclusive
490,481
459,641
432,296
409,132
732,022
652,325
646,111
579,802
Less: Future finance charges
(85,911)
(72,523)
–
–
Present value of lease obligations
646,111
579,802
646,111
579,802
Less: Amount due for settlement within 12 months
(shown under current liabilities)
(213,815)
(170,670)
Amount due for settlement after 12 months
432,296
409,132
It is the Group’s policy to lease certain of its plant and equipment under finance leases. The average lease term is 5
years (2015: 5 years). For the financial year ended 31 March 2016, the average borrowing rate was 2.77% (2015: 2.72%)
per annum. Interest rates are fixed at the contract date, and thus expose the Group to fair value interest rate risk. All
leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The fair value of the Group’s lease obligations approximates their carrying amount.
The Group’s obligations under finance leases are secured by way of corporate guarantees issued by the Company and
plant and equipment (Note 20).
