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NOTES TO FINANCIAL STATEMENTS
(cont’d)
31 March 2016

30 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (cont’d)
Liquidity risk management
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its

financial liabilities that are settled by delivering cash or another financial asset. The contracted undiscounted cash
outflows on financial liabilities approximate their carrying amounts and are generally settled within one year. The
Group’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 Group’s reputation.
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate to
finance the Group’s operations and to mitigate the effects of fluctuations in cash flow. Typically the Group ensures
that it has sufficient cash on demand to meet expected operational expenses including the servicing of financial
obligations; this excludes the potential impact of extreme circumstances that cannot be reasonably predicted.
In addition, the Group maintains the following lines of credit:
• $11 million bankers’ guarantee facility that is unsecured.
• $440 million that can be drawn down to meet short-term financing needs.
Interest risk management
Surplus funds from the Group’s operations are invested in bank deposits and with fund managers. The Group
has no material exposure to interest rate risk from fixed deposits and borrowings as the interest rates are on fixed
rate basis. The Group’s investments in fixed income securities that are managed by fund managers (classified
as financial assets at fair value through profit or loss) are exposed to interest rate risk.
Sensitivity analysis for interest risk
If movements in interest rates result in a 3% (2015: 3%) appreciation/depreciation in the value of the fixed
income investments, all other variables being held constant, the Group’s surplus would have been higher/lower
by $12,382,000 (2015: $12,463,000).

84 NTU ANNUAL REPORT 2016