Financial Report 2019

Notes to the Consolidated Financial Statements 合併財務報表附註 The University of Hong Kong 香港大學 107 37. FINANCIAL RISK MANAGEMENT – Cont’d 財務風險管理－續 (i) Financial risk factors – Cont’d (1) Market risks – Cont’d Price risk Price risk represents the risk that the value of investment assets will decrease as a result of falling market prices. The Group is exposed to equity and fund price risk. Equity and fund price risk is managed by diversification of investments through asset allocation limits for different markets, sectors and individual stocks. A small portion of equities are authorised to be invested in emerging markets as prescribed in the specific lists of approved developed markets and emerging markets set by the Investments Sub-Committee. The exposures to key markets are represented by the exposures to local and foreign currencies listed above. Short selling in equity securities is not allowed. At 30 June 2019, if the prices of the respective equity and fund investments had been 10% higher/ lower, with all other variables held constant, the Group’s surplus for the year would have increased/ decreased by approximately HK$863 million (2018: HK$871 million). The Group is not exposed to commodity price risk. Interest rate risk Interest rate risk is the risk that the value and future cash flows of interest bearing instruments will decrease as a result of change in interest rate. The Group invests in a substantial amount of fixed rate debt securities and bank deposits. The Group’s interest income and operating cash flows vary with changes in market interest rates. The Group’s interest rate risk arises primarily from debt securities and bank deposits. Bank deposits expose the Group to cash flow interest rate risk. Interest income will decrease as a result of a decrease in deposit interest rates. Fixed rate debt securities expose the Group to fair value interest rate risk. Value of fixed rate debt securities will drop when market interest rates increase. The Group manages its cash flow interest rate risk and fair value interest rate risk by maintaining an appropriate mix of fixed rate debt securities and bank deposits. (i) 財務風險因素－續 (1) 市場風險－續 價格風險 價格風險是因市場價格出現變 動而引致財務資產出現虧損的 風險。本機構承受股本證券及 基金的價格風險以透過資產分 配限制不同市場，不同組合及 個別股票設定作分散投資的方 法來管理此風險及基金，在投 資附設委員會已界定的成熟市 場和新興市場名單當中，新興 市場的資產分配額度只佔很少 部分。投放到主要市場的情況 可參考上列的港元及外幣計值 表。本機構並不沽空股本證券。 於二零一九年六月三十日，若 股票及基金價格上升 / 下跌百 分之十，在其他所有變數維持 不變的情況下，本機構於年內 的盈餘將增加╱減少約港幣 八億六千三百萬元（二零一八年 為港幣八億七千一百萬元）。 本機構並無承受商品價格風險。 利率風險 利率風險是因利率變動而引致 金融利率工具的公平價值及未 來現金流量減少的風險。本機 構投資於若干按固定利率發行 的債券及銀行存款，故本機構 的利息收入和營運現金流量會 受市場利率波動而變更。 本機構的利率風險主要來自債 券及銀行存款。該等銀行存款 令本機構承受現金流量利率風 險。存款利率下調會導致利息 收入減少。按固定利率發行的 債券令本機構承受公平值利率 風險。市場利率上調會導致固 定利率的債券價值下降。 本機構利用適當的分配按固定 利率發行的債券及銀行存款來 管理其現金流量及公平值利率 風險。 Notes to the Consolidated Financial Statements 合併財務報表附註 2019 Financial Report 二零一九財務報告 108 37. FINANCIAL RISK MANAGEMENT – Cont’d 財務風險管理－續 (i) Financial risk factors – Cont’d (1) Market risks – Cont’d Interest rate risk - Cont’d At 30 June 2019, it is estimated that a general increase/decrease of 25 basis points in bank deposit interest rate, with all other variables held constant, would have increased/decreased the Group’s surplus for the year by approximately HK$21.7 million (2018: HK$17.3 million). This analysis has been determined assuming that the change in interest rates had occurred at the end of each reporting period and had been applied to the bank deposits in existence at that date, with an assumption that fixed term instruments which expire during the next reporting period will be rolled over at the expiry of that term at the new market rate. (2) Credit risk The Group’s exposure to credit risk is represented by the carrying value of cash and cash equivalents, bank depos i t s , l oans r ece i vab l e , accoun t s receivable, prepayments and deposits and debt securities. The exposure limits to financial institutions are set by the Investments Sub-Committee according to the deposits base, capital base and the credit rating of the institutions. The credit risk on liquid funds and financial instruments is limited because the counterparties have good credit standing. Loans receivable are mainly loans to staff and students and the Group has established procedures to control the granting and recovery of the loans. Accounts receivable, prepayments and deposits arise from the ordinary activities of the Group and there are ageing controls to limit the exposure. (i) 財務風險因素－續 (1) 市場風險－續 利率風險－續 於二零一九年六月三十日，在 其他所有變數維持不變的情況 下，若銀行存款利率上升╱下 調二十五點子，本機構於年內 的盈餘會增加╱減少約港幣 二千一百七十萬元（二零一八年 為港幣一千七百三十萬元）。以 上分析乃假設利率變動於每個 報告期末發生，並已用於計算 當日已存的銀行存款，同時假 設將於下一個報告期間到期的 固定年期投資工具將會於到期 日以新的市場利率續期。 (2) 信貸風險 本機構承受的信貸風險為現金 及等同現金、銀行存款、應收 貸款、應收賬項、預付款及押 金及債券。 投資附設委員會根據金融機構 的存款基礎、資本基礎及信貸 評級制訂相關的信貸額度。就 本機構的流動資金及金融工具 而言，由於交易方皆為信貸評 級良好的財政機構故此本機構 只承受有限之信貸風險。應收 貸款主要為對員工及學生的貸 款，而本機構有既定的程序來 控制發放及收回貸款。應收賬 項、預付款及押金來自本機構 的日常營運，以到期日管理控 制有關投放額度。