Page 135 - URA Annual Report 2020-21

(expressed in Hong Kong Dollars)
2. Significant accounting policies (Continued)
(s) Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances and deposits held at call with banks with original maturities of three months or less.
(t) Employee benefits
Salaries and annual leave are accrued and recognised as an expense in the year in which the associated services are rendered by the employees of the Group.
The Group operates defined contribution schemes and pays contributions to scheme administrators on a mandatory or voluntary basis. The contributions are recognised as an expense when they are due.
(u) Related parties
(i) A person, or a close member of that person’s family, is related to the Group if that
person:
(1) has control or joint control over the Group;
(2) has significant influence over the Group; or
(3) is a member of the key management personnel of the Group or the Group’s parent.
(ii) An entity is related to the Group if any of the following conditions applies:
(1) The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(2) The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.
(3) The entity is controlled or jointly controlled by a person identified in (i).
(4) A person identified in (i)(1) has significant influence over the entity or is a member of the
key management personnel of the entity (or of a parent of the entity).
Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.
3. Financial risk management and fair value of financial instruments
(a) Financial risk factors
The Group’s activities expose it to a variety of financial risks: cash flow interest rate risk, credit risk, liquidity risk, price risk and foreign exchange risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise the potential adverse effects on the Group’s financial performance.
(i) Cash flow interest rate risk
The Group is exposed to cash flow interest rate risk due to the fluctuation of the prevailing market interest rate on bank deposits. Nevertheless, the Group’s income and operating cash flows are substantially independent of changes in market interest rates.
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