30 FINANCIAL RISK AND CAPITAL MANAGEMENT
The major financial instruments of the Group include liquid funds, investments, trade and other receivables, trade and
other payables and borrowings. Details of these financial instruments are disclosed in the respective notes to the financial
statements. The risk management programme of the Group is designed to minimise the financial risks of the Group. These
risks include credit risk, interest rate risk, foreign currency risk and liquidity risk.
(a) Cash management and funding
The Group generally obtains long-term financing to meet funding requirements. Management of the Group regularly and
closely monitors its overall net debt position and reviews its funding costs and maturity profile to facilitate refinancing.
(b) Capital management
The Group’s strategy involves adopting and maintaining an appropriate mix of debt and equity to ensure optimal returns to
unitholders, while maintaining su¢cient flexibility to implement growth strategies.
The Group may consider diversifying its sources of debt financing by accessing the debt capital markets through the
issuance of bonds to optimise the debt maturity profile and to make adjustments to the capital structure in light of changes
in economic conditions.
The Group has complied with all externally imposed capital requirements which include leverage ratio.
At 31 December 2015, total equity amounted to HK$62,167,607,000 (2014: HK$63,394,195,000), and consolidated net debt of
the Group was HK$26,306,390,000 (2014: HK$25,955,594,000).
(c) Credit exposure
The Group’s holdings of cash and cash equivalents expose the Group to counterparty credit risk. The Group controls its
credit risk to non-performance by its counterparties through regular review and monitoring of their credit ratings.
The receivables from customers and other counterparties also expose the Group to credit risk. The Group controls its credit
risk by assessing the credit quality of the customer, taking into account its financial position, past experience and other
factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the management.
The utilisation of credit limits is regularly monitored.
(d) Interest rate exposure
The Group’s main interest risk exposures relate to cash and cash equivalents, loans from non-controlling interests, bank and
other debts. The Group manages its interest rate exposure with a focus on reducing the Group’s overall cost of debt and
exposure to changes in interest rates.
The impact of a hypothetical 5 basis points increase in market interest rate at the end of the reporting period would reduce
the Group’s profit and unitholders’ equity by HK$13,570,000 (2014: HK$12,994,000).
Notes to the
Financial Statements
OPTIMISING FOR THE FUTURE
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