Axiom 2014 Annual Report - page 73

Notes to the Financial Statements
for the year ended 30 September 2014
71
2014 Annual Report
20. Related parties (continued)
c. KMP and executive director remuneration summary
2014
$000
2013
$000
Short term employee benefits
Salaries
679
644
Non-cash benefits
1
–
Total short-term benefits
680
644
Post-employment benefits
Superannuation
55
43
Other benefits
Share-based payments – performance rights*
281
–
Total remuneration
1,016
687
* Performance rights were granted in April 2013 following approval by shareholders at the Annual General Meeting held on 22 April 2013.
The performance rights are charged to expense over the life of the rights. The expense in relation to the performance rights is calculated
as fair value using the Black-Scholes model. For further disclosure in respect of the share-based payment see part (c) Performance Rights
Plan of the remuneration report in the Directors’ report.
Performance rights issued will automatically vest into fully paid ordinary shares upon specific conditions being achieved. The
performance condition is a market hurdle as disclosed in part (c) Performance Rights Plan of the remuneration report. The amounts
that appear are amounts required under Australian Accounting Standards to be expensed by the Company in respect of the allocation
of long term incentives. Whether or not these performance rights are received will depend on achieving appropriate vesting conditions
as discussed above. No performance rights were exercised during the year.
21. Financial risk management and fair values
Exposure to credit, liquidity, interest rates and currency risks arises in the normal course of the Group’s business.
The Group’s exposure to these risks and the financial risk management policies and practices used by the Group are
described below and are limited by the Group’s financial management policies and practices described below.
a. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of
contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for
the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring
of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers
and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for
impairment. Credit terms are generally 14 to 30 days from the invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or
in entities that the Board has otherwise cleared as being financially sound. Where the Group is unable to ascertain a
satisfactory credit risk profile in relation to a customer or counterparty, the risk may be further managed through title
retention clauses over goods or obtaining security by way of personal or commercial guarantees over assets of sufficient
value that can be claimed against in the event of any default.
Credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding
the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial
assets (net of any provisions) as presented in the statement of financial position. Credit risk also arises through the
provision of financial guarantees, as approved at Board level.
Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality.
GROUP FINANCIAL REPORT
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