Company: JL
Filing Date: 2025-07-28
Form Type: 20-F
Source: 0001213900-25-068049
Chunk: 192

Company: J-Long Group Ltd
Filing Date: 2025-07-28
Form: 20-F
Item: Item 18
Chunk 192
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 variable-rate bank loans and is mainly concentrated on the fluctuation of Hong Kong
Prime Rate arising from the Company’s bank loans. The Company has not used any derivative instruments to mitigate its exposure
associated with interest rate risk.

Liquidity Risk

Liquidity risk is the risk
that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering
cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Company’s reputation.

Typically, the Company ensures
that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of
financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural
disasters.

Labor Price Risk

Our business requires a
substantial number of personnel. Any failure to retain stable and dedicated labor by us may lead to disruption to our business operations.
Although we have not experienced any labor shortage to date, we have observed an overall tightening and increasingly competitive labor
market. We have experienced, and expect to continue to experience, increases in labor costs due to increases in salary, social benefits
and employee headcount. We compete with other companies in our industry and other labor-intensive industries for labor, and we may not
be able to offer competitive remuneration and benefits compared to them. If we are unable to manage and control our labor costs, our
business, financial condition and results of operations may be materially and adversely affected.

Fair Value Measurement

Accounting guidance defines
fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted
to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers
assumptions that market participants would use when pricing the asset or liability.

F-11

J-LONG GROUP LIMITED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

Accounting guidance establishes
a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. A financial instrument’s categorization within the fair value