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AXIOM MINING LIMITED
ANNUAL REPORT 2015
Notes to the
financial statements
for the year ended 30 September 2015
GROUP FINANCIAL REPORT
21. Financial risk management and fair values (continued)
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 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 $1,094K (2014: $2,145K) 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:
Interest bearing
Non-interest bearing
Total carrying amount
as per the balance sheet
Weighted average
effective interest rate
Financial instruments
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
2015
%
2014
%
(i) Financial assets
Cash
1
1,306
2,304
–
–
1,306
2,304
2.5
3.5
Other receivables
–
–
1,129
1,091
1,129
1,091
–
–
Total financial assets
1,306
2,304
1,129
1,091
2,435
3,395
(ii) Financial liabilities
Other payables
–
–
3,937
1,768
3,937
1,768
–
–
Borrowings – Convertible notes
2
1,132
678
–
–
1,132
678
8.0
14.5
Borrowings – Other
1
–
8
–
–
–
8
–
14.4
Capitalised lease liabilities
2
2,848
2,335
–
–
2,848
2,335
10.0
10.0
Provisions
–
–
345
153
345
153
–
–
Total financial liabilities
3,980
3,021
4,282
1,921
8,262
4,942
1
At oating interest rates
2
At xed interest rates
The Group is not exposed to significant risk from interest rate sensitivity.