Axiom Mining 2015 Annual Report

GROUP FINANCIAL REPORT

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

66

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:

AXIOM MINING LIMITED ANNUAL REPORT 2015

Total carrying amount as per the balance sheet

Weighted average effective interest rate

Interest bearing

Non-interest bearing

2015 $000

2014 $000

2015 $000

2014 $000

2015 $000

2014 $000

2015 %

2014 %

Financial instruments

(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

–

–

1,132

678

–

–

1,132

678

8.0

14.5

Borrowings – Convertible notes 2

–

8

–

–

–

8

–

14.4

Borrowings – Other 1

2,848

2,335

–

–

2,848

2,335

10.0

10.0

Capitalised lease liabilities 2

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.