Axiom Mining 2015 Annual Report

COMPANY FINANCIAL REPORT

Notes to the financial statements for the year ended 30 September 2015

98

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 Company. 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 Company 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 which 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. The Company 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 AU$1,094,000 (2014: AU$2,084,000) to the Australia and New Zealand Banking Group Limited relating to funds on deposit and cash at bank.

22. Related parties In addition to the transactions disclosed elsewhere in these financial statements, the Company had the following material transactions with related parties during the year: a. Balances with related parties For the year ended 30 September 2014, an advance of AU$28,000 to a director, Ryan Richard Mount was interest-bearing at market rate. This advance was fully paid as at 30 September 2015 including interest at market rates. b. Transactions with related parties Stephen Ray Williams, a director of the Company is a consultant of Kemp Strang Lawyers. For the year ended 30 September 2015, AU$133,000 (2014 AU$98,000) was paid to Kemp Strang Lawyers for legal services to the Company on normal commercial terms. During the year, fund raising and advisory services were provided by JRG Consulting Pty Limited (‘JRG’). Mr Jeremy Gray, a director of the Company, is a non- executive director and controlling shareholder of JRG. The Board considers that the JRG agreement is a commercial arrangement entered into on reasonable arm’s length terms. There is no obligation for the Company to acquire services exclusively from JRG or for JRG to exclusively provide services to the Company. Total amount paid to JRG during the year including the provision of services provided by Mr Jeremy Gray was AU$29,000 (2014: Nil). For the year ended 30 September 2015 (exclusive of GST), consultancy fees of AU$8,000 were charged by Burrawong Holdings Pty Limited to the Company on behalf of Stephen Ray Williams. c. Key management personnel of the Company In the opinion of the directors, the directors of the Company represented the key management personnel of the Company. Further details of directors’ emoluments are included In Note 26 to the financial statements. Exposure to credit, liquidity, interest rates and currency risks arises in the normal course of the Company’s business. The Company’s exposure to these risks and the financial risk management policies and practices used by the Company are described below and are limited by the Company’s financial management policies and practices described below. 23. Financial risk management andÞfairÞvalues

AXIOM MINING LIMITED ANNUAL REPORT 2015