Annual Report 2022 39 Price risk The consolidated entity is exposed to price risk through its investment in Nyrada Inc. A change in share price (market risk) could impact the value of the investment held by the consolidated entity in Nyrada Inc. Management of the consolidated entity manages this risk by monitoring the performance of Nyrada and its underlying share price. As this is considered a long term investment and this other price risk due to market movements is out of the control of the consolidated entity, there is no direct strategy to mitigate this risk other than to carefully monitor the underlying share price. The below table shows a sensitivity analysis on the value of the investment in Nyrada ordinary shares if the Nyrada share price fluctuates by +/-20%. The tale below also shows an estimated sensitivity analysis for both tranches of Nyrada performance shares if the value fluctuates by +/- 20%. Note this is an estimated impact and does not consider movements in the probabilities of meeting the market conditions used in the Monte Carlo simulation to arrive at the valuation of these performance shares. Average price increase Average price decrease Consolidated - 2022 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Nyrada Inc. ordinary shares 20% 901,078 901,078 (20%) (750,898) (750,898) Nyrada Inc. performance shares -Tranche 1 20% 90,965 90,965 (20%) (75,804) (75,804) Nyrada Inc. performance shares -Tranche 2 20% 90,965 90,965 (20%) (75,804) (75,804) 1,083,008 1,083,008 (902,506) (902,506) Average price increase Average price decrease Consolidated - 2021 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Nyrada Inc. ordinary shares 20% 2,135,888 2,135,888 (20%) (1,779,906) (1,779,906) Nyrada Inc. performance shares -Tranche 1 20% 359,298 359,298 (20%) (299,415) (299,415) Nyrada Inc. performance shares -Tranche 2 20% 359,298 359,298 (20%) (299,415) (299,415) 2,854,484 2,854,484 (2,378,736) (2,378,736) Liquidity risk Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable. The Company is exposed to liquidity risk via its trade and other payables. Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet the commitments associated with its financial instruments. Responsibility for liquidity risk rests with the Board who manage liquidity risk by monitoring undiscounted cash flow forecasts and actual cash flows provided to them by the Company’s Management at Board meetings to ensure that the Company continues to be able to meet its debts as and when they fall due. Contracts are not entered into unless the Board believes that there is sufficient cash flow to fund the additional activity. Remaining contractual maturities The following tables detail the consolidated entity’s remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
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