35.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
(d)
Liquidity risk
(Continued)
The contractual expiry by maturity of the Group’s and the Company’s corporate guarantees
amounting to approximately $8.5 million (Note 33(b)) is one year or less. The maximum amount of
the corporate guarantees is allocated to the earliest period in which the guarantee could be called.
(e)
Market 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 the market prices (other than interest or exchange
rates).
The Group is exposed to equity price risk arising from its investment in quoted equity securities
and quoted bonds. These securities are quoted on the stock exchanges of New York, NASDAQ,
Tokyo, Hong Kong and Deutsche Börse Xetra. The quoted bonds are issued from their respective
companies and subsequently traded between participants directly over-the-counter (“OTC”). Due
to the diversity of qualities, maturities and yields, bond prices are determined by the willingness
of participants to transact at a given price and are usually not quoted by a market maker such as
an exchange.
The Group’s objective is to manage investment returns to achieve real-term capital preservation
and long-term capital growth.
Held for trading investments
At the end of the reporting period, if the market price of the investments had been 2% higher/lower
with all other variables held constant, the Group’s profit before tax would have been S$302,000
(2014: S$388,000) higher/lower, arising as a result of higher/lower fair value gains on held for
trading investments in equity instruments.
I N N O T E K L I M I T E D
A N N U A L R E P O R T 2 0 1 5
119
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
