Annual Report 2019

ANNUAL REPORT 2019 249 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 March 2019 47. FINANCIAL INSTRUMENTS (continued) b. Financial risk management objectives and policies (continued) Market risk (continued) Price risk The Group is exposed to equity price risk and market price risk arising from financial assets at FVTPL and equity instruments at FVTOCI. Price risk sensitivity analysis The sensitivity analyses below have been determined based on the exposure to equity and debt price risk at the end of the reporting period. If the price of the respective equity and debt securities have been 5% (2018: 5%) higher/lower: • profit after tax would have increased/decreased by HK$139,480,000 (2018: HK$140,282,000) as a result of the changes in fair value of financial assets at FVTPL. • investment revaluation reserve would have increased/decreased by HK$53,355,000 (2018: HK$7,999,000) as a result of the changes in fair value of equity instrument at FVTOCI (2018: available-for-sale investments). Credit risk and impairment assessment At the end of each reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group in the event of the counterparties failure to discharge their obligations in relation to each class of recognised financial asset are the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial position. The Group also invests in debt securities which expose the Group to credit risk. The Investment Committee regularly reviews the portfolio of debt securities and assesses the credit quality of the issuers. In the regard, the directors of the Company consider that the credit risk relating to debt securities held for trading is not significant. The Group has no significant concentration of credit risk, with exposure spread over a number of counterparties and customers, except for amounts due from an investee company, associates and joint ventures and loan receivables, which in aggregate, constitute over 8% (2018: 4%) of the total financial assets. The Group actively monitors the outstanding amounts owed by each debtor and identifies any credit risks in a timely manner in order to reduce the risk of a credit related loss. In this regard, the directors of the Company consider that the Group’s credit risk is significantly reduced. In addition, the Group performs impairment assessment under ECL model upon application of HKFRS 9 (2018: incurred loss model) on the outstanding balances. Trade debtors and contract assets arising from contracts with customers In order to minimise the credit risk, the management of the Group has policies in place to ensure the sales of properties are made to purchasers with an appropriate financial strength and appropriate percentage of down payments. Monitoring procedures are in place to ensure that follow-up action is taken to recover overdue debts. In addition, the Group performs impairment assessment under ECL model upon application of HKFRS 9 (2018: incurred loss model) on trade balances based on past due status. Contract assets are assessed on an individual basis for impairment purposes.