Page 86 - Annual Report

HONG KONG ACADEMY OF MEDICINE
香港醫學專科學院
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020

19. FINANCIAL INSTRUMENTS (Continued)

b) Liquidity risk (Continued)

Contractual undiscounted
cash outflow
Total Carrying
Within contractual amount
1 year or undiscounted at 31
on demand cash flow December
HK$ HK$ HK$

For the year ended 31 December
2020

Non-derivative financial liabilities
Accruals and other payables 4,596,255 4,596,255 4,596,255

For the year ended 31 December
2019

Non-derivative financial liabilities
Accruals and other payables 9,161,793 9,161,793 9,161,793

c) Interest rate risk

The Group is exposed to interest rate risk only to the extent that it earns bank interest on
cash and deposits.

The effective interest rates per annum relating to cash at bank and time deposits at the
end of the reporting period ranges from 0.01% to 2.40% (2019: 0.01% to 2.40%) for the
Group.

Sensitivity analysis

At 31 December 2020, it is estimated that a general increase/decrease of 100 basis
points in interest rates, with all other variables held constant, would decrease/increase
the Group’s deficit for the year and increase/decrease the Group’s general fund by
approximately HK$680,000 (2019: HK$553,000). Other components of equity would not
be affected (2019: HK$Nil) by the changes in interest rates.

The sensitivity analysis above has been determined assuming that the change in
interest rates had occurred at the end of the reporting period and had been applied to
the exposure to interest rate risk for financial instruments in existence at that date. The
100 basis point increase represents management’s assessment of a reasonably
possible change in interest rates over the period until the end of next reporting period.
The analysis is performed on the same basis for 2019.

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84 HKAM Annual Report 2021