Axiom Mining 2015 Annual Report

COMPANY FINANCIAL REPORT

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

99

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:

AXIOM MINING LIMITED ANNUAL REPORT 2015

Total carrying amount as per the end of the reporting period

Weighted average effective interest rate

Interest bearing

Non-interest bearing

2015 AU$000

2014 AU$000

2015 AU$000

2014 AU$000

2015 AU$000

2014 AU$000

2015 %

2014 %

Financial instruments

(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 (ii) Financial liabilities Other payables Borrowings – Convertible notes 2

1,170 2,207 6,936

379 8,106 2,586

–

–

1,767

753 1,767

753

–

–

1,132

678

– –

–

1,132

678

8.0

14.5 14.4

Borrowings – Other 1

– –

8

–

8

– –

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.