Axiom 2014 Annual Report - page 74

Notes to the Financial Statements
for the year ended 30 September 2014
72
Axiom Mining Limited
21. Financial risk management and fair values (continued)
The Group manages its credit risk associated with funds on deposit and cash at bank by only dealing with reputable
financial institutions. At year end the Company has one material exposure of $2,145K (2013: $376K) to the Australia and
New Zealand Banking Group Limited relating to funds on deposit and cash at bank.
b. Liquidity risk
Liquidity risk arises from the possibility that the Group may encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities.
The Group manages this risk through the following mechanisms:
––
preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities;
––
maintaining a reputable credit profile;
––
managing credit risk related to financial assets; and
––
only investing surplus cash with major financial institutions.
Individual operating entities within the Group are responsible for their own cash management, including the short
term investment of cash surpluses and the raising of loans to cover expected cash demands, subject to approval by the
parent Company’s Board when the borrowings exceed certain predetermined levels of authority. The Group’s policy is
to regularly monitor its liquidity requirements and its compliance with lending covenants, to ensure that it maintains
sufficient reserves of cash and readily realisable marketable securities and adequate committed lines of funding from
major financial institutions to meet its liquidity requirements in the short and longer term.
c. Interest rate risk
The Group’s exposure to interest rate risk and the effective interest rates of financial assets and financial liabilities, both
recognised and unrecognised at the balance sheet date, are as follows:
Financial instruments
Interest bearing Non-interest bearing
Total carrying amount
as per the balance
sheet
Weighted average
effective interest rate
2014
$000
2013
$000
2014
$000
2013
$000
2014
$000
2013
$000
2014
%
2013
%
(i) Financial assets
Cash
1
2,304
691
–
–
2,304
691
3.5
2.2
Other receivables
–
–
1,091
319
1,091
319
–
–
Total financial assets
2,304
691 1,091
319
3,395 1,010
(ii) Financial liabilities
Other payables
–
–
1,768
1,049
1,768
1,049
–
–
Borrowings – Convertible
notes
2
678
–
–
–
678
–
14.5
–
Borrowings – Other
1
8
20
8
20
14.4
14.4
Capitalised lease liabilities
2
2,335
1,861
–
–
2,335
1,861
10.0
10.0
Provisions
–
–
153
93
153
93
–
–
Total financial liabilities
3,021
1,881 1,921
1,142
4,942 3,023
1
At floating interest rates
2
At fixed interest rates
The Group is not exposed to significant risk from interest rate sensitivity.
GROUP FINANCIAL REPORT
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