NOTES TO THE FINANCIAL STATEMENTS 31 March 2024 27. FINANCIAL RISK MANAGEMENT (CONT’D) (a) Market risk (cont’d) (iii) Price risk (cont’d) If prices for quoted unit trusts, quoted equity securities and other investments had increased/decreased by 5% (2023 : 5%), with all other variables held constant, it will result in a $35,796,000 increase/decrease (2023 : $32,103,000) in the fair value of financial assets at fair value through profit or loss and the net surplus. (b) Liquidity risk There is minimal liquidity risk as the University maintains an adequate level of highly liquid assets in the form of cash and short-term bank deposits. The table below analyses non-derivative financial liabilities of the University into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant. Less than 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years $’000 $’000 $’000 $’000 At 31 March 2024 Other payables 30,323 – – – Borrowings 25,288 21,317 62,693 243,625 Lease liabilities 340 340 296 – At 31 March 2023 Other payables 31,172 – – – Borrowings 25,588 21,680 63,635 263,999 (c) Credit risk Credit risk refers to the risk that a counterparty will default on its obligations resulting in financial loss to the University. The University places its cash and short-term bank deposits with reputable financial institutions. The investment portfolio is managed by a professional fund manager and in-house investment team. The maximum exposure to credit risk in the event that the counterparties fail to perform their obligations in relation to each class of recognised financial asset is the carrying amount of those assets as stated in the balance sheet. The University’s current credit risk grading framework comprises the following categories: Category Description Basis for recognising expected credit losses (“ECL”) Performing The counterparty has low risk of default and does not have any past-due amounts. 12-month ECL Doubtful Amount is >30 days past due or there has been a significant increase in credit risk since initial recognition. Lifetime ECL – not credit-impaired In default Amount is >90 days past due or there is evidence indicating the asset is credit-impaired. Lifetime ECL – credit-impaired Write-off There is evidence indicating that the debtor is in severe financial difficulty and the University has no realistic prospect of recovery. Amount is written off p. 88 SINGAPORE UNIVERSITY OF TECHNOLOGY AND DESIGN
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