Annual Report 2011 年 報 - Neo-Neon LED Lighting International Ltd

NotES to tHE CoNSoLIDAtED
fINANCIAL StAtEMENtS
6. FINANCIAL INSTRUMENTS (Continued)
b. Financial risk management objectives and policies (Continued)
Market risk (Continued)
(iii)
Other price risk
The Group is exposed to equity price risk through its investments in listed equity securities and
gold, silver and platinum commodities. The management manages this exposure by maintaining
a portfolio of investments with different risks.
Sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to price risks at
the reporting date. For sensitivity analysis purpose, the sensitivity rate is 10% in the current
period as a result of the volatile financial market.
If the prices of the respective instruments had been 10% (2009: 10%) higher/lower, profit for
the period would increase/decrease by HK$12,110,000 (2009: HK$39,131,000) as a result of
the changes in fair value of investments held-for-trading.
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent price risk as
the period end exposure does not reflect the exposure during the period.
Liquidity risk management
The directors of the Company have built an appropriate liquidity risk management framework for
the management of the Group’s short, medium and long-term funding and liquidity management
requirements. The Group manages liquidity risk by a level of cash and cash equivalents deemed
adequate by the management to finance the Group’s operations and mitigate the effects of
fluctuations in cash flows. The management monitors the utilisation of bank borrowings and ensures
compliance with loan covenants.
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 financial liabilities are based on the
agreed repayment dates. The table includes both interest and principal cash flows. To the extent that
interest flows are floating rate, the undiscounted amount is derived from interest rate curve at the end
of the reporting period.
ANNUAL REPORT 2011 69