TUNG LOK RESTAURANTS (2000) LTD / Annual Report
2016
88
Notes to the financial statements
For the financial year ended 31 March 2016
31.
Operating lease arrangements (cont’d)
Operating lease payments represent rentals payable by the Group for its restaurant premises and office lease. Leases
are negotiated and rentals fixed for an average of 3 years (2015: 3 years). Most leases contain an option to renew.
According to the terms of the contracts entered into by certain operating subsidiaries at the end of the reporting period,
contingent rental would be payable by these subsidiaries based on a percentage of the monthly sales turnover in excess
of a specified amount. Contingent rental is not included here as it is currently not determinable.
32.
Categories of financial instruments
The following table sets out the financial instruments as at the end of the reporting period:
Group
Company
2016
2015
2016
2015
$
$
$
$
Financial assets
Loans and receivables, at amortised cost:
Cash and bank balances
14,024,952 15,254,490 3,321,030 6,315,325
Trade receivables
1,784,366 2,193,137
–
–
Other receivables
1,048,698
877,419
72,083
729,821
Advances to subsidiaries (Note 16(A))
–
–
9,084,613 5,751,176
Long-term security deposits
1,625,401 1,495,494
–
–
Sub-total
18,483,417 19,820,540 12,477,726 12,796,322
Available-for-sale financial assets
16,000
16,000
–
–
Total
18,499,417 19,836,540 12,477,726 12,796,322
Financial liabilities
At amortised cost:
Trade payables
3,362,408 3,660,296
–
–
Other payables
10,191,504 11,276,074
196,409
218,636
Finance leases
646,111
579,802
–
–
Bank loans
3,276,230 5,249,376
–
–
Total
17,476,253 20,765,548
196,409
218,636
Financial guarantee contracts
–
–
366,352
452,675
The Company has issued corporate guarantees to banks for borrowings of its subsidiary, where the Company is required
to reimburse the banks if the subsidiary fails to make principal or interest payments when due in accordance with the
terms of its borrowings.
Financial guarantees are initially recognised at their fair values and are subsequently amortised to profit or loss over
the period of the subsidiary’s borrowings, unless it is probable that the Company will reimburse the bank for an amount
higher than the unamortised amount.
Fair value of the financial guarantees is estimated using market lending rate for similar type of loan guarantee
arrangement as at the end of the reporting period.
