CHINESE SWIMMING CLUB

Notes To The Financial Statements For The Financial Year Ended 31 December 2022

4. FINANCIAL INSTRUMENTS, FINANCIAL RISK AND CAPITAL RISK MANAGEMENT (CONT’D)

(b) Financial risk management policies and objectives (Cont’d)

Interest rate risk management (Cont’d)

Fair value sensitivity analysis for fixed rate instruments

The Club does not account for any fixed rate financial assets at FVTPL. Therefore, in respect of the fixed rate instruments, a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by $36,888 (2021: $75,638). This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

Liquidity risk management

Liquidity risk refers to the risk that the Club will encounter difficulties in meeting its short-term obligations due to shortage of funds. The Club’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. It is managed by matching the payment and receipt cycles. The Club’s objective is to maintain a balance between continuity of funding and flexibility. The Club’s operations are financed mainly through its internal healthy bank balances as well as collection from its subscription fees, membership transfer fees, entrance and conversion fees, takings from jackpot machines and other activities organised by the Club. The management committee are satisfied that funds are available to finance the operations of the Club.