101 / 112
AXIOM MINING LIMITED
ANNUAL REPORT 2015
99
Notes to the
financial statements
for the year ended 30 September 2015
COMPANY FINANCIAL REPORT
23. Financial risk management and fair values (continued)
b. Liquidity risk
Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.
The Company 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.
The Company’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.
The Company’s exposure to liquidity risk is minimal as the Company had entered into a convertible note facility agreement
for up to AU$15 million to enable it to meet its liabilities as and when they fall due. Further details of which are set out in
Note 2 to the financial statements.
c. Interest rate risk
The Company’s exposure to interest rate risk and the effective interest rates of financial assets and financial liabilities, both
recognised and unrecognised at the end of the reporting period, are as follows:
Financial instruments
Interest bearing
Non-interest bearing
Total carrying amount
as per the end of the
reporting period
Weighted average
effective interest rate
2015
AU$000
2014
AU$000
2015
AU$000
2014
AU$000
2015
AU$000
2014
AU$000
2015
%
2014
%
(i) Financial assets
Cash
1
1,170 2,207
–
–
1,170 2,207
2.5
3.5
Other receivables
–
–
189
379
189
379
–
–
Amount due from subsidiaries
–
–
6,747
–
6,747
–
–
–
Total financial assets
1,170 2,207 6,936
379 8,106 2,586
(ii)
Financial liabilities
Other payables
–
–
1,767
753 1,767
753
–
–
Borrowings – Convertible
notes
2
1,132
678
–
–
1,132
678
8.0
14.5
Borrowings – Other
1
–
8
–
–
8
–
14.4
Provisions
–
–
156
139
156
139
–
–
Total financial liabilities
1,132
686 1,923
892 3,055 1,578
1
At oating interest rates.
2
At xed interest rates.
The Company is not exposed to significant risk from interest rate sensitivity.
d. Fair values
All financial instruments are carried at amounts not materially different from their fair values as at 30 September 2015
and 2014.