NOTES
TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2016
(In Singapore dollars)
126
ANNUAL REPORT 2015/2016
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
(c)
Liquidity risk (cont’d)
The table below shows the contractual expiry by maturity of the Group and Company’s contingent liabilities
and commitments. The maximum amount of the financial guarantee contracts are allocated to the earliest
period in which the guarantee could be called.
Total
contractual
cash flow
$’000
1 year
or less
$’000
Group
2016
Issued financial guarantees to external parties
3,746
3,746
2015
Issued financial guarantees to external parties
4,987
4,987
Company
2016
Issued guarantees for bank facilities utilised by subsidiaries
20,265
20,265
Issued financial guarantees to external parties
103
103
2015
Issued guarantees for bank facilities utilised by subsidiaries
37,217
37,217
Issued financial guarantees to external parties
103
103
(d)
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 its cash and bank balances placed with reputable banks as well as bank borrowings. Bank
borrowings are contracted with the objectives of minimising interest burden by carefully evaluating the
relative benefits between fixed rate and variable rate whilst maintaining an acceptable debt maturity profile.
