TUNG LOK RESTAURANTS (2000) LTD / Annual Report
2016
94
Notes to the financial statements
For the financial year ended 31 March 2016
33.
Financial risks management objectives and policies (cont’d)
(d)
Liquidity risk management (cont’d)
Non-derivative financial assets (cont’d)
Company
2016
Weighted
average
effective
interest rate
On demand
or within
1 year
Within 2 to
5 years
After
5 years Adjustment
Total
%
$
$
$
$
$
Non-interest bearing:
Cash and bank balances
–
3,321,030
–
–
– 3,321,030
Other receivables
–
72,083
–
–
–
72,083
Advances to subsidiaries
(Note 16(A))
2.91
– 9,994,480
– (909,867)
9,084,613
Total
3,393,113 9,994,480
– (909,867) 12,477,726
2015
Non-interest bearing:
Cash and bank balances
–
6,315,325
–
–
– 6,315,325
Other receivables
–
729,821
–
–
–
729,821
Advances to subsidiaries
(Note 16(A))
3.16
– 5,977,871
– (226,695)
5,751,176
Total
7,045,146 5,977,871
– (226,695) 12,796,322
(e)
Commodity price risk
Certain commodities, principally shark’s fins, dried foodstuff, meat, fish and other seafood delicacies, are
generally purchased based on market prices established with the suppliers. Although many of the products
purchased are subject to changes in commodity prices, certain purchasing contracts or pricing arrangements
contain risk management techniques designed to minimise price volatility. Typically, the Group uses these
types of purchasing techniques to control costs as an alternative to directly using financial instruments to
hedge commodity prices. Where commodity cost increases significantly and appears to be long-term in nature,
management addresses the risk by adjusting the menu pricing or changing the product delivery strategy.
(f)
Fair value of financial assets and financial liabilities
The carrying amounts of cash and bank balances, trade and other current receivables, trade and other payables
approximate their respective fair values due to the relatively short-term maturity of these financial instruments.
The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to financial
statements.
The fair values of financial assets and financial liabilities are determined in accordance with generally
accepted pricing models based on discounted cash flow analysis using prices from observable current market
transactions.
(g)
Financial instruments subject to off-setting, enforceable master netting arrangements and similar agreements
The Group does not have any financial instruments which are subject to offsetting under enforceable master
netting arrangements or similar netting agreements.
