Annual Report 2012 - HKExnews

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Notes to the Consolidated Financial Statements (Continued) 3 Financial Risk Management (Continued) 3.1 Financial risk factors (Continued) (c) Liquidity risk The Group’s policy is to regularly monitor current and expected liquidity requirements and its compliance with debt covenants, to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from banks and other financial institutions to meet its liquidity requirements in the short and longer term. Management believes there is no liquidity risk as the Group has sufficient committed facilities to fund its operations. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Within 1 year or on demand 1 to 2 years 2 to 5 years Total contractual undiscounted cash flows Carrying amount HK$ HK$ HK$ HK$ HK$ At 31 December 2012 Trade and other payables 12,812,779 — — 12,812,779 12,812,779 Licence fee payables — non-current portion — 223,574 217,062 440,636 440,636 Finance leases liabilities 518,903 118,728 148,410 786,041 745,303 Total 13,331,682 342,302 365,472 14,039,456 13,998,718 At 31 December 2011 Trade and other payables 11,057,011 — — 11,057,011 11,057,011 Licence fee payables — non-current portion — 230,281 440,636 670,917 670,917 Finance leases liabilities 719,010 418,869 267,138 1,405,017 1,398,805 Total 11,776,021 649,150 707,774 13,132,945 13,126,733 3.2 Capital risk management The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. 72 FOCUS MEDIA NETWORK LIMITED Annual Report 2012
Notes to the Consolidated Financial Statements (Continued) 3 Financial Risk Management (Continued) 3.2 Capital risk management (Continued) The Group manages its fund conservatively by maintaining a comfortable level of cash and cash equivalents to meet continuous operational needs. 3.3 Fair value estimation The carrying value less impairment provision of current receivables and payables are a reasonable approximation of their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. 4 Critical Accounting Estimates and Judgements The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. (a) Useful lives of property, plant and equipment The Group is required to estimate the useful lives of property, plant and equipment in order to ascertain the amount of depreciation charges for each reporting period. The useful lives are estimated at the time of purchases of these assets after considering future technology changes, business developments and the Group’s strategies. The Group performs annual reviews to assess the appropriateness of the estimated useful lives. Such review takes into account any unexpected adverse changes in circumstances or events, including declines in projected operating results, negative industry or economic trends and rapid advancement in technology. The Group extends or shortens the useful lives and/or makes impairment provisions according to the results of the review. (b) Current and deferred income taxes The Group is subject to current income tax in Hong Kong and Singapore. Significant judgement is required in determining the relevant provision for income taxes. There are certain transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax provisions in the period in which such determination is made. Deferred income tax assets are relating to tax losses recognised when management considers to be probable that future taxable profit will be available against which the tax losses can be utilised. When the expectation is different from the original estimate, such differences will impact the recognition of deferred income tax assets and taxation changes in the period in which such estimate is changed. FOCUS MEDIA NETWORK LIMITED Annual Report 2012 73
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Corporate Information Board of Dire
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Chairman’s Statement (Continued)
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Management Discussion and Analysis
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Use of Proceeds The Company was inc
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Annual Report 2012 - HKExnews

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