94
TEHO INTERNATIONAL INC LTD.
Annual Report 2015
28 FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONT’D)
Liquidity risk (cont’d)
The above amounts disclosed in the maturity analysis are the contractual undiscounted
cash flows and such undiscounted cash flows differ from the carrying amounts included
in the statement of financial position. The undiscounted amounts on the borrowing with
variable interest rates are determined by reference to the conditions existing at the reporting
date. When the counterparty has a choice of when an amount is paid, the liability is included
on the basis of the earliest date on which it can be required to pay.
It is expected that all the liabilities will be settled at their contractual maturity. The
classification of the financial assets is shown in the statement of financial position as they
may be available to meet liquidity needs and no further analysis is deemed necessary.
Financial guarantee contracts
For financial guarantee contracts the maximum earliest period in which the guarantee would
be called is used. As at 30 June 2015 and 2014, no claims on the financial guarantees are
expected. The following table shows the maturity analysis of the financial guarantees.
Less than
1 year
$
Company
2015
Corporate guarantees in favour of subsidiaries
62,533,404
2014
Corporate guarantees in favour of subsidiaries
49,123,492
28 FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONT’D)
Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The Group’s and
the Company’s exposures to interest rate risk relates primarily to the Group’s interest-
bearing assets and liabilities. The Group do not enter into interest rate swaps to manage its
interest rate risk. These exposures are managed partly using natural hedges that arise from
offsetting interest rate sensitive assets and liabilities.
Exposure to interest rate risk
The table below sets out the Group’s and the Company’s exposure to interest rate risks.
Group
Company
2015
2014
2015
2014
$
$
$
$
Fixed rate instruments
Financial assets
13,000
13,000 1,942,841
–
Financial liabilities
(8,995,351) (7,239,038) (1,942,841)
–
(8,982,351) (7,226,038)
–
–
Variable rate instruments
Financial assets
13,713,315 15,791,309
145,810
168,285
Financial liabilities
(53,538,053) (41,884,454)
–
–
(39,824,738) (26,093,145)
145,810
168,285
NOTES TO THE
FINANCIAL STATEMENTS
Year ended 30 June 2015
