Annual Report 2019

ANNUAL REPORT 2019 247 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 March 2019 47. FINANCIAL INSTRUMENTS a. Categories of financial instruments 2019 2018 HK$’000 HK$’000 Financial assets Available-for-sale investments – 159,987 Financial assets at FVTPL 3,355,310 3,360,056 Equity instruments at FVTOCI 1,067,144 – Financial assets at amortised cost 3,823,541 – Loans and receivables (including cash and cash equivalents) – 5,772,749 Derivative financial instruments 7,012 518 8,253,007 9,293,310 Financial liabilities Derivative financial instruments – 39,650 Amortised cost 23,146,380 18,032,832 23,146,380 18,072,482 b. Financial risk management objectives and policies Details of the Group’s financial instruments are disclosed above and in the respective notes. The risks associated with these financial instruments include market risk (interest rate risk, foreign currency risk and price risk), credit risk and impairment assessment, and liquidity risk. The policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Market risk Interest rate risk The Group is exposed to cash flow interest rate risk due to the fluctuation of the prevailing market interest rate on bank deposits and variable-rate borrowings. In addition, the Group is also exposed to interest rate risks in relation to investments in its debt securities which are measured at FVTPL. Interest rate sensitivity analysis The sensitivity analysis considers only borrowings which have significant impact on the consolidated financial statements. The analysis is prepared assuming that the borrowings outstanding at the end of the reporting periods were outstanding for the whole year. 50 basis points represent the best estimation of the possible change in the interest rates over the period until the end of next reporting period. If interest rates had been increased/decreased by 50 basis points (2018: 50 basis points) and all other variables were held constant, the Group’s profit after tax would have decreased/increased by HK$42,716,000 (2018: HK$21,629,000) and the interest capitalised would have increased/decreased by HK$36,255,000 (2018: HK$33,167,000). In the management’s opinion, the sensitivity analysis is unrepresentative of the interest rate risk as the year end exposure does not reflect the exposure during the year.