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CORDLIFE GROUP LIMITED
| ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
36.
FINANCIAL RISK MANAGEMENT
(CONTINUED)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage
of funds. The Group’s liquidity risk arises primarily from mismatches of the maturities of financial assets and
liabilities. The Group’s objective is to maintain adequate funding to meet the operating requirements of the
business and to facilitate the Group’s ongoing growth plans.
The Group’s liquidity risk management policy is to maintain sufficient liquid financial assets.
At reporting date, the Group has cash and cash equivalents and unpledged fixed deposits of $27,994,000
(2014: $44,421,000). Hence, the Group’s exposure to liquidity risk is minimal.
Market price risk
Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will
fluctuate because of changes in market prices (other than interest or exchange rates).
The Group is exposed to market price risk arising from its financial assets designated at fair value through
profit or loss (Note 15).
At the end of the reporting period, if the share price had been 5% higher/lower with all other variables held
constant, the Group’s profit for the year would have been $6,281,000 (2014: $2,525,000) higher/lower, arising
as a result of higher/lower fair value gains on financial asset designated at fair value through profit or loss
and derivative asset.
Foreign currency risk
The Group is exposed to foreign currency risk mainly arising from its financial assets denominated in USD.
At the end of the reporting period, if USD/SGD strengthened/weakened by 5% with all other variables held
constant, the Group’s profit for the year would have been $10,089,000 (2014: $2,525,000) higher/lower,
arising as a result of higher/lower revaluation gains on financial assets denominated in USD.
37.
FAIR VALUE OF ASSETS AND LIABILITIES
(a)
Fair value hierarchy
The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy has the following levels:
•
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities
•
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices), and
•
Level 3 – Inputs for the asset or liability that are not based on observable market data
(unobservable inputs)
