Trading Fund Report 2020/21

Notes to the Financial Statements

(Amount expressed in thousands of Hong Kong dollars, unless otherwise stated.)

1. General

The Office of the Telecommunications Authority (OFTA) Trading Fund was established on 1 June 1995 under the Legislative Council Resolution passed on 10 May 1995 pursuant to sections 3, 4 and 6 of the Trading Funds Ordinance (Cap. 430). By virtue of section 25 of the Communications Authority Ordinance (CAO) (Cap. 616) which came into operation on 1 April 2012, the OFTA Trading Fund was renamed as the Office of the Communications Authority (OFCA) Trading Fund (the Fund) on the same date. The OFCA serves as the executive arm of the Communications Authority (CA), which is a statutory body set up under the CAO to administer and enforce the Broadcasting Ordinance (Cap. 562), the Broadcasting (Miscellaneous Provisions) Ordinance (Cap. 391), the CAO, the Telecommunications Ordinance (Cap. 106) and the Unsolicited Electronic Messages Ordinance (UEMO) (Cap. 593), as well as the Trade Descriptions Ordinance (Cap. 362) and the Competition Ordinance (Cap. 619), and to perform any function under or by virtue of any Ordinance. The Fund, which is under the policy portfolio of the Commerce and Economic Development Bureau of the Government of the Hong Kong Special Administrative Region (the Government), supports the principal activities of the CA, as follows:

• licensing and regulating telecommunications services and broadcasting services;
  
• managing Hong Kong’s radio frequency spectrum;
  
• providing advisory, planning and support services on telecommunications, broadcasting, anti-spamming matters to the Government;
• overseeing technical standards and representing the Government on international affairs;
• enforcing the UEMO; and
• ensuring the enforcement of fair trading practices and fair competition in relation to telecommunications and broadcasting sectors.
  

2. Significant accounting policies

(a) Statement of compliance

These financial statements have been prepared in accordance with accounting principles generally accepted in Hong Kong and Hong Kong Financial Reporting Standards (HKFRSs), a collective term which includes all applicable individual HKFRSs, Hong Kong Accounting Standards and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (HKICPA). A summary of the significant accounting policies adopted by the Fund is set out below.

The HKICPA has issued certain new or revised HKFRSs that are first effective or available for early adoption for the current accounting period of the Fund. Note 3 provides information on the changes, if any, in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Fund for the current and prior accounting periods reflected in these financial statements.

(b) Basis of preparation of the financial statements

The measurement basis used in the preparation of the financial statements is historical cost.

The preparation of financial statements in conformity with HKFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

There are no critical accounting judgments involved in the application of the Fund’s accounting policies. There are also no key assumptions concerning the future, or other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next year.

(c) Property, plant and equipment

The property, plant and equipment appropriated to the Fund on 1 June 1995 were measured initially at deemed cost equal to the value contained in the Resolution of the Legislative Council passed on 10 May 1995. Property, plant and equipment acquired since 1 June 1995 are capitalised at the actual costs of acquisition or installation.

The following items of property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses (note 2(f)) :

• leasehold land and buildings held for own use; and
• plant and equipment, including telecommunications and broadcasting equipment, computer systems, furniture, fixtures and motor vehicles.

Depreciation is calculated to write off the cost of items of property, plant and equipment, less their estimated residual value, on a straight-line basis over their estimated useful lives as follows:

Gains or losses arising from the disposal of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of comprehensive income on the date of disposal.

(d) Leases

A lease is recognised in the statement of financial position as a right-of-use asset with a corresponding lease liability at the lease commencement date, except that variable lease payments and payments associated with short-term leases having a lease term of 12 months or less and leases of low-value assets are charged to the statement of comprehensive income on a straight-line basis over the lease term.

A right-of-use asset is measured at cost less accumulated depreciation and impairment losses (note 2(f)). The right-of-use asset is depreciated on a straight-line basis over the shorter of the lease term and the asset’s estimated useful life.

The lease liability is measured at the present value of the lease payments payable over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Fund’s incremental borrowing rate. The lease liability is subsequently adjusted by the effect of the interest on and the settlement of the lease liability.

The lease liability is remeasured if the Fund changes its assessment of whether it will exercise an extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in the statement of comprehensive income if the carrying amount of the right-of-use asset has been reduced to zero.

(e) Intangible assets

Intangible assets include acquired computer software licences and capitalised development costs of computer software programs. Expenditure on development of computer software programs is capitalised if the programs are technically feasible and the Fund has sufficient resources and intention to complete development. The expenditure capitalised includes direct labour and cost of materials. Intangible assets are stated at cost less accumulated amortisation and any impairment losses (note 2(f)).

Amortisation of intangible assets is charged to the statement of comprehensive income on a straight-line basis over the assets’ estimated useful lives of 5 to 12 years.

(f) Impairment of non-financial assets

The carrying amounts of non-financial assets, including property, plant and equipment, right-of-use assets and intangible assets, are reviewed at the reporting date to identify any indication of impairment.

If any such indication exists, an impairment loss is recognised in the statement of comprehensive income whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of an asset is the higher of its fair value less costs of disposal and value in use.

(g) Financial assets and financial liabilities

(i) Initial recognition and measurement

The Fund’s financial assets comprise placement with the Exchange Fund, trade and other receivables, amounts due from related parties, interest receivables, bank deposits, and cash and bank balances.

The Fund’s financial liabilities comprise trade and other payables, provision for restitution claims, provision for employee benefits, amounts due to related parties and lease liabilities.

The Fund recognises financial assets and financial liabilities on the date it becomes a party to the contractual provisions of the instrument. At initial recognition, financial assets and financial liabilities are measured at fair value plus or minus transaction costs that are directly attributable to the acquisition of the financial assets or the issue of the financial liabilities.

(ii) Classification and subsequent measurement

The Fund classifies all financial assets as subsequently measured at amortised cost using effective interest method, on the basis that they are held within a business model whose objective is to hold them for collection of contractual cash flows and the contractual cash flows represent solely payments of principal and interest. The measurement of loss allowances for financial assets is based on the expected credit loss model as described in note 2(g)(iv).

The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating and recognising the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or to the amortised cost of the financial liability. When calculating the effective interest rate, the Fund estimates the expected cash flows by considering all contractual terms of the financial instrument but does not consider the expected credit losses. The calculation includes all fees received or paid between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

The Fund classifies all financial liabilities as subsequently measured at amortised cost using effective interest method.

The Fund reclassifies a financial asset when and only when it changes its business model for managing the asset. A financial liability is not reclassified.

(iii) Derecognition

A financial asset is derecognised when the contractual rights to receive the cash flows from the financial asset expire, or where the financial asset together with substantially all the risks and rewards of ownership have been transferred.

A financial liability is derecognised when the obligation specified in the contract is discharged or cancelled, or when it expires.

(iv) Impairment of financial assets

The Fund applies a three-stage approach to measure expected credit losses on financial assets (other than trade receivables) measured at amortised cost and to recognise the corresponding loss allowances and impairment losses or reversals, with the change in credit risk since initial recognition determining the measurement bases for expected credit losses:

Stage 1: 12-month expected credit losses

For financial instruments for which there has not been a significant increase in credit risk since initial recognition, the portion of the lifetime expected credit losses that represent the expected credit losses that result from default events that are possible within the 12 months after the reporting date are recognised.

Stage 2: Lifetime expected credit losses – not credit impaired

For financial instruments for which there has been a significant increase in credit risk since initial recognition but that are not credit impaired, lifetime expected credit losses representing the expected credit losses that result from all possible default events over the expected life of the financial instruments are recognised.

Stage 3: Lifetime expected credit losses – credit impaired

For financial instruments that have become credit impaired, lifetime expected credit losses are recognised and interest income is calculated by applying the effective interest rate to the amortised cost rather than the gross carrying amount.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

Determining significant increases in credit risk

At each reporting date, the Fund assesses whether there has been a significant increase in credit risk for financial instruments since initial recognition by comparing the risk of default occurring over the remaining expected life as at the reporting date with that as at the date of initial recognition. The assessment considers quantitative and qualitative historical information as well as forward-looking information. A financial asset is assessed to be credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.

The Fund assesses whether there has been a significant increase in credit risk since initial recognition on an individual or collective basis. For collective assessment, financial instruments are grouped on the basis of shared credit risk characteristics, taking into account investment type, credit risk ratings and other relevant factors.

Placements with banks with an external credit rating of investment grade are considered to have a low credit risk. Other financial instruments are considered to have a low credit risk if they have a low risk of default and the counterparty or borrower has a strong capacity to meet its contractual cash flow obligations in the near term. The credit risk on these financial instruments is assessed as not having increased significantly since initial recognition.

When a financial asset is uncollectible, it is written off against the related loss allowance. Such assets are written off after all the necessary procedures have been completed and the amount of the loss has been determined. Subsequent recoveries of amounts previously written off are recognised in the statement of comprehensive income.

Measurement of expected credit losses

Expected credit losses of a financial instrument are an unbiased and probability-weighted estimate of credit losses (i.e. the present value of all cash shortfalls) over the expected life of the financial instrument. A cash shortfall is the difference between the cash flows due to the Fund in accordance with the contract and the cash flows that the Fund expects to receive. For a financial asset that is credit impaired at the reporting date, the Fund measures the expected credit losses as the difference between the asset's gross carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate.

(h) Deferred income

If a customer pays consideration, or the Fund has an unconditional right to consideration, before the Fund transfers a service to the customer, the Fund recognises its contract liability as deferred income. The Fund derecognises the deferred income and recognises revenue when the Fund transfers the service and, therefore, satisfies its performance obligation.

(i) Revenue recognition

The Fund recognises revenue from contracts with customers when it satisfies a performance obligation by transferring a promised service to a customer, at the amount of consideration to which the Fund expects to be entitled in exchange for the service.

Interest income is recognised as it accrues using the effective interest method.

Other income is recognised on an accrual basis.

(j) Employee benefits

The employees of the Fund comprise civil servants and contract staff. Salaries, staff gratuities and annual leave entitlements are accrued and recognised as expenditure in the year in which the associated services are rendered by the staff. For civil servants, staff on-costs, including pensions and housing benefits provided to the staff by the Government, are charged as expenditure in the year in which the associated services are rendered.

For civil servants employed on pensionable terms, their pension liabilities are discharged by reimbursement of the staff on-cost charged by the Government. For other staff, contributions to the Mandatory Provident Fund Scheme are charged to the statement of comprehensive income as incurred.

(k) Related parties

The Fund is a separate accounting entity within the Government established under the Trading Funds Ordinance. During the year, the Fund has entered into transactions with various related parties, including government bureaux and departments, other trading funds and financially autonomous bodies controlled or significantly influenced by the Government, in the ordinary course of its business.

(l) Foreign currency translation

Foreign currency transactions during the year are translated into Hong Kong dollars using the spot exchange rates at the transaction dates. Monetary assets and liabilities denominated in currencies other than Hong Kong dollars are translated into Hong Kong dollars using the closing exchange rate at the reporting date. All foreign currency translation differences are recognised in the statement of comprehensive income.

(m) Cash and cash equivalents

Cash and cash equivalents include cash and bank balances, and other short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, having been within three months of maturity when placed or acquired.

(n) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when there is a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made.

Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

3. Changes in accounting policies

The HKICPA has issued certain new or revised HKFRSs that are first effective for the current accounting period of the Fund. There have been no changes to the accounting policies applied in these financial statements for the years presented as a result of these developments.

The Fund has not applied any new standard or interpretation that is not yet effective for the current accounting period (note 23).

4. Revenue from contracts with customers

The Fund supports the CA to administer and enforce various ordinances including the Broadcasting Ordinance and the Telecommunications Ordinance. The Fund’s performance obligations in contracts with customers mainly involve licensing and regulating telecommunications services and broadcasting services. A licensee is required to pay service fee in advance. The Fund satisfies its performance obligation as the service is rendered and recognises the fee over time on a straight-line basis.

For advisory and project, and frequency assignment and protection services provided to related parties, the Fund satisfies its performance obligation as the service is rendered and recognises a service fee over time on a full cost recovery basis.

5. Operating costs

6. Other income / (expense)

7. Rate of return on fixed assets

The rate of return on fixed assets, the derivation of which is consistent with that before the adoption of HKFRS 16 “Leases” (see note 2(d)) to achieve comparability, is calculated as total comprehensive income (excluding, if any, interest income, interest expenses and settlement of restitution claims) divided by average net fixed assets, and expressed as a percentage. Fixed assets include property, plant and equipment and intangible assets only. The Fund is expected to meet a target rate of return on fixed assets of 5.5% per year (2020: 5.5%) as determined by the Financial Secretary.

8. Property, plant and equipment

9. Leases

(a) Right-of-use assets

(b) Lease liabilities

The table below shows changes in lease liabilities, including both cash and non-cash changes.

The remaining contractual maturities of lease liabilities, which are based on contractual undiscounted cash flows, are shown below:

(c) Expense items in relation to leases recognised in the statement of comprehensive income

(d) Total cash outflow for leases

10. Intangible assets

Computer software licences and system development costs

11. Placement with the Exchange Fund

The balance of the placement with the Exchange Fund amounted to HK$544,551,000 (2020: HK$525,122,000), being the principal sum of HK$480,000,000 plus interest paid but not yet withdrawn at the reporting date of HK$64,551,000 (2020: HK$45,122,000). The term of the placement is six years from the date of placement, during which the amount of principal sum cannot be withdrawn.

Interest on the placement is payable at a fixed rate determined every January. The rate is the average annual investment return of the Exchange Fund’s Investment Portfolio for the past six years or the average annual yield of three-year Government Bonds for the previous year subject to a minimum of zero percent, whichever is the higher. The interest rate has been fixed at 4.7% per annum for the year 2021 and at 3.7% per annum for the year 2020.

12. Trade and other receivables

13. Contract balances with customers

(a) Receivables and contract assets

For services provided to licensees, the balance of receivables at the reporting date is presented as trade receivables in note 12. The Fund does not have any contract assets.

(b) Contract liabilities

The Fund’s obligations to provide services to licensees for which the Fund has received advance payments from the licensees are presented as deferred income in the statement of financial position. In general, licensees are required to pay licence fees upon issue of the licence, and on each anniversary thereafter during the validity period of the licences. Period of validity for each type of licence varies, ranging from 1 to 20 years. When a licensee does not pay licence fee on an anniversary date, the licence may be suspended or revoked and the contract with the licensee would become unenforceable. With effect from 1 August 2020, licence fees of certain types of licences are to be paid biennially. The balances of deferred income represent the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially satisfied) at the reporting date. For the deferred income from biennial licence fees, the Fund expects to recognise as revenue within two years. For other deferred income, the Fund expects to recognise as revenue within one year. No consideration from contracts with customers is not included in the transaction price.

Significant changes in the balances of deferred income during the year are shown below:

14. Provision for employee benefits

This represents the estimated liability for employees’ annual leave and obligations on contract-end gratuities payable to contract staff for services rendered up to the reporting date (see note 2(j)).

15. Trading fund capital

This represents the Government’s investment in the Fund.

16. Development reserve

This is a reserve serving as a regulating mechanism to meet the target return as well as to reduce the need for future fee increases.

17. Retained earnings

In January 2020, the Government directed the transfer of the target returns of HK$25,322,000 in total (see note 7) for the three years ended 31 March 2019 into General Revenue pursuant to section 10(1) of the Trading Funds Ordinance. The transfer was completed in April 2020. In March 2021, the Government indicated that no transfer was required in respect of the year ended 31 March 2020. As at 31 March 2021, the Fund had set aside retained earnings of HK$7,685,000, being the calculated amount of target return for the year ended 31 March 2021, for future transfer to the Government. The actual amount and timing of future transfer will be subject to the direction by the Government. While the target return is entrusted to be retained in the Fund, it will become payable to the Government upon receiving direction from the Government and is not subject to the Fund’s disposal pursuant to section 6(6)(c) of the Trading Funds Ordinance.

Apart from the target return, the Fund had also set aside retained earnings of HK$20,799,000 (2020: HK$30,442,000) for restitution of excessive licence fees paid by licensees (see note 21).

18. Cash and cash equivalents

19. Capital commitments and other commitments

At 31 March 2021, the Fund had capital commitments, so far as not provided for in the financial statements, as stated below:

To help resolve billing disputes in deadlock between telecommunications service providers and their customers by means of mediation, a voluntary Customer Complaint Settlement Scheme (the scheme) was set up in November 2012 and administered by the Communications Association of Hong Kong, the industry association. By a Memorandum of Understanding amended on 30 June 2020, the Fund will provide recurrent funding for the long term operation of the scheme in the amount not exceeding HK$1,500,000 per annum. During the year, the Fund had contributed HK$863,000 (2020: HK$981,000) to the scheme.

20. Related party transactions

Apart from those separately disclosed in the financial statements, the other material related party transactions for the year are summarised as follows:

1. fees income for services provided to related parties included advisory and project services amounting to HK$31,379,000 (2020: HK$23,134,000) and frequency assignment and protection services amounting to HK$13,393,000 (2020: HK$12,690,000);
   
2. expenses for services received from related parties included accommodation, repairs and maintenance, legal advice, central administration and auditing. In total, the Fund incurred HK$24,684,000 (2020: HK$25,677,000) on these services; and
   
3. property, plant and equipment acquired from related parties included motor vehicles, and furniture and fixtures. The total amount of these fixed assets amounted to HK$467,000 (2020: HK$1,693,000).
   

Services provided by or to related parties were charged at the rates payable by the general public where such services were also available to members of the public, or on a full cost recovery basis where such services were only available to related parties. Fixed assets supplied by related parties were charged at full cost.

Balances with related parties as at 31 March 2021 are set out in the statement of financial position.

21. Contingent liabilities

As at 31 March 2020 and 2021, there were several outstanding litigation cases filed with the court by licensees, claiming for restitution of excessive licence fees paid by them. The Government intends to vigorously contest these claims and will be responsible for claims for those amounts related to notional profits tax and dividends which have been paid to the Government by the Fund. In October 2018, the Government and the CA decided that out of the retained earnings of the Fund as at 31 March 2018, HK$82,959,000, being the total amount of notional profits tax and dividend retained in the Fund after deduction of target returns required by the Government, would be set aside for refund of licence fees to the licensees, pending resolution of the claims for restitution. The Fund considers that, based on the legal advice obtained, the overall financial effect of the claims, other than those with provision for restitution claims recognised in the statement of financial position, cannot be estimated reliably.

During the year, settlement of part of the restitution claims totalling HK$9,643,000 (2020: HK$52,517,000) was recognised in the statement of comprehensive income and the remaining balance of retained earnings set aside for restitution claims as at 31 March 2021 was HK$20,799,000 (2020: HK$30,442,000).

22. Financial risk management

(a) Investment policy

To provide an ancillary source of income, surplus cash is invested in a portfolio of financial instruments. The portfolio includes fixed deposits and placement with the Exchange Fund. It is the Fund’s policy that all investments in financial instruments should be principal-protected.

(b) Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in currency exchange rates.

The Fund does not have significant exposure to currency risk as substantially all of its financial instruments are denominated in Hong Kong dollars.

(c) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss.

The Fund’s credit risk is primarily attributable to placement with the Exchange Fund, trade and other receivables, amounts due from related parties, interest receivables, bank deposits and bank balances. The Fund has a credit policy in place and the exposure to these credit risks is monitored on an ongoing basis.

To minimise credit risks, all fixed deposits are placed with licensed banks in Hong Kong. These financial assets are considered to have a low credit risk. The loss allowances are measured at amounts equal to 12-month expected credit losses, which are assessed to be immaterial by the Fund.

The credit quality of bank deposits and bank balances, analysed by the ratings designated by Moody’s or their equivalent, is shown below:

While other financial assets are subject to the impairment requirements, the Fund has estimated that their expected credit losses are minimal and considers that no loss allowance is required.

The maximum exposure to credit risk of the financial assets of the Fund at the reporting date is equal to their carrying amounts.

(d) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.

The Fund manages liquidity risk by forecasting the amount of cash required and monitoring the working capital of the Fund to ensure that all liabilities due and known funding requirements could be met. As the Fund has a strong liquidity position, it has a very low level of liquidity risk.

(e) Interest rate risk

Interest rate risk refers to the risk of loss arising from changes in market interest rates. This can be further classified into fair value interest rate risk and cash flow interest rate risk.

Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market interest rates. Since all of the Fund’s bank deposits bear interest at fixed rates, their fair values will fall when market interest rates increase. However, as they are all stated at amortised cost, changes in market interest rates will not affect their carrying amounts and the Fund’s profit and reserves.

Cash flow interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Fund’s exposure to cash flow interest rate risk is small as it has no major floating-rate investments.

(f) Other financial risk

The Fund is exposed to financial risk arising from changes in the interest rate on the placement with the Exchange Fund which is determined every January (note 11). It was estimated that, as at 31 March 2021, a 50 basis point (2020: 50 basis point) increase / decrease in the interest rates for 2020 and 2021, with all other variables held constant, would increase / decrease the profit for the year by HK$2,723,000 (2020: decrease / increase the loss for the year by HK$2,626,000).

(g) Fair value

The fair values of financial instruments quoted in active markets are based on their quoted prices at the reporting date. In the absence of such quoted market prices, fair values are estimated using present value or other valuation techniques, using inputs based on market conditions existing at the reporting date. 

All financial instruments are stated in the statement of financial position at amounts equal to or not materially different from their fair values.

23. Possible impact of amendments, new standards and interpretations issued but not yet effective for the year ended 31 March 2021

Up to the date of issue of these financial statements, the HKICPA has issued a number of amendments, new standards and interpretations which are not yet effective for the year ended 31 March 2021 and which have not been early adopted in these financial statements.

The Fund is in the process of making an assessment of the expected impact of these amendments, new standards and interpretations in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a significant impact on the financial statements.