for the year ended 31 December 2016
NOTES TO THE
FINANCIAL STATEMENTS
Annual Report 2016
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126
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25.
Financialriskmanagementobjectivesandpolicies
TheGroup and theCompany are exposed to financial risks arising from its operations and theuseof financial
instruments. The key financial risks include interest rate risk, liquidity risk, credit risk and foreign currency
risk. TheGroupdoes not speculate in the currencymarkets or holdor issue derivatives financial instruments.
TheBoard reviewsandagreespoliciesandprocedures for themanagementof these risks.TheAuditCommittee
provides independent oversight to the effectiveness of the riskmanagement process.
There has been no change to theGroup’s exposure to these financial risks or themanner inwhich itmanages
andmeasures the risks for financial year 2016.
Interest rate risk
Interest rate risk is the risk that the fair valueor future cash flows of theGroup’s and theCompany’s financial
instrumentswill fluctuate because of changes inmarket interest rates.
The Group’s and the Company’s exposure tomovements inmarket interest rates relates primarily to its short
termdeposits.
TheGroup’spolicy is toplaceexcess fundswith short-term tenure inorder tomaintainahigh level of liquidity.
TheGroup hasminimal interest rate risk hence no sensitivity analysis is prepared.
Liquidity risk
Liquidityrisk is therisk that theGroupor theCompanywillencounterdifficulty inmeetingfinancialobligations
due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from
mismatches of thematurities of financial assets and liabilities.TheGroup’s and theCompany’s objective is to
maintain sufficient level of cash and short-term deposits tomeet itsworking capital requirements.
