110
Cordlife Group Limited
Annual Report 2016
Notes to
The Financial Statements
for the financial year ended 30 June 2016
37. Financial risk management (cont’d)
Credit risk (cont’d)
As at 30 June 2016, the Group has bond receivable of $4,200,000 (2015: $34,493,000). In the prior financial year
ended 30 June 2015, the Group has a loan of $61,960,000 due from one external party. This was fully repaid in
the current financial year. Details are disclosed in Note 19 to the financial statements.
There are no other significant concentrations of credit risk within the Group. Information regarding financial
assets which are impaired, and financial assets which are past due but not impaired is disclosed in Note 18.
Interest rate risk
Interest rate 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 interest rates. The Group’s exposure to interest rate risk arises primarily
from the Group’s interest-bearing borrowings whose interest rates are subject to re-pricing every quarter after
July 2014.
Fixed deposits of varying maturity periods are placed with reputable banks and financial institutions and
generate interest income at a fixed rate during the tenure of the fixed deposits and are not subject to changes
in interest rate fluctuation.
Sensitivity analysis for interest rate risk
At the end of the reporting period, if interest rates had been 75 (2015: 75) basis points lower/higher with all
other variables held constant, the Group’s profit net of tax would have been $81,000 (2015: $74,000) higher/
lower, arising mainly as a result of lower/higher interest expense on floating rate interest-bearing borrowings.
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 $123,100,000
(2015: $27,994,000). Hence, the Group’s exposure to liquidity risk is minimal.
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 $385,000 (2015: $10,089,000) higher/lower, arising as
a result of higher/lower revaluation gains on financial assets denominated in USD.
